Important Changes to UK Furlough Scheme

Important Changes to UK Furlough Scheme

The government have announced a number of changes for employers using the Coronavirus Job Retention Scheme (CJRS).

Scheme to close for new entrants

From 10 June 2020, employers will no longer be able to use the CJRS for employees who have not previously been furloughed. This date will allow employees to be on furlough for the required 3 weeks before the scheme closes for new entrants on 30 June.

The scheme however will remain open until October for those who have been furloughed since it was first opened, and parents who have been on statutory maternity and paternity leave.

Flexible furlough

From 1 July, businesses will be able to bring back furloughed employees on a part time basis. It will be down to each business to decide what part time means, and staff will be able to work as much or as little as the business requires, with no minimum time during which they must be on furlough.

If staff are unable to return to work or employers do not have work for them to do, they can remain on furlough and the employer can continue to claim for their full hours under the existing rules.

Reduced government contributions

From 1 August, the support from the government is going to decrease.

The first change will take place on 1 August where the government will continue to pay 80% of employee’s wages to a cap of £2500 per month, however the employers will be responsible for National Insurance (NI) and pension contributions.

From 1 September, the government will reduce its contribution to 70% or a cap of £2190, meaning employers will be responsible for 10%, plus the NI and pension contributions.

Finally, from 1 October, the government element will reduce further to 60% or £1875, with the employer picking up 20% plus the NI and pension contributions.

If you have any questions regarding the Coronavirus Job Retention Scheme, please contact our Payroll department who will be happy to assist you.

Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.

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