The Coronavirus Job Retention Scheme, better known as the furlough scheme, is changing from 1 July 2020.
Although the scheme will remain in place until the end of October a number of key changes are being made:
Withdrawal of scheme from new entrants
From 1 July employers will only be able to furlough employees that have already been furloughed for a full three-week period by then.
This effectively means that employees must have been placed on furlough by 10 June in order to qualify for the scheme.
Employers will not be able to make a claim under the scheme for employees that are furloughed for the first time from 11 June onwards.
Part-time working
Until the end of June, furloughed employees must not do any work that makes money or provides services for their employer, however from July employees can begin to return to work on a part time basis.
Employers will pay 100% of the wages costs for those hours worked by their employees, with the furlough scheme continuing to make up 80% of the costs for those hours that they are not able to work.
Reduction in Funding
During June and July, the government will continue to pay 80% of wages costs for furloughed employees while they are not able to work. These wages costs include employers National Insurance and pension contributions.
During August, the government will continue to pay 80% of salaries up to a cap of £2,500, but will no longer contribute towards employers National Insurance or pension contributions.
During September, the government contribution to wages will fall to 70%. Employers will be required to fund the remaining 10% so that employees continue to receive 80% of their wages (subject to the £2,500 cap)
During October, the government contributions to wages will fall to 60%. Employers will be required to fund the remaining 20%.
The scheme is not currently expected to continue into November.
Making the claim
Claims will continue to be made through the online portal which can be accessed here.
HMRC’s guidance and useful links relating to the Coronavirus Job Retention Scheme can be accessed here.
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