Unwinding the furlough scheme
The closing features of the furlough scheme – Coronavirus Job Retention Scheme – are now in the public domain. We have summarised below changes that affect the scheme from 1 July 2020. From this date the progressive changes are:
From 1 July, you can bring back workers part-time, but if you do, you will be responsible for paying their wages for time worked. Government will continue to pay up to 80% of payroll costs for time not worked capped at £2,500.
The only change from 1 August 2020 is that from this date you will be responsible for paying all employers’ NIC and pension costs for work done and for work not done. For many smaller businesses this will not create significant cost as most employers’ NIC cost is covered by the Employment Allowance (this allows eligible employers to reduce their annual employer NIC costs by up to £4,000).
From 1 September, employers will be asked to contribute 10% of furlough costs for hours not worked. The government’s contribution will reduce to 70% capped at £2,187.50.
From 1 October, the employer’s contribution to furlough costs is increased to 20%. The government contribution will drop to 60% capped at £1,875. Please note that the CJRS – the furlough scheme – will close 31 October 2020.