Many of our clients await the details of the furlough extension and on Friday we received an update from the Chancellor. Please find below the government updates, it is important to note that from August onward the government scheme will slowly be tapered.
June and July
- The government will continue to pay 80% of wages up to a cap of £2,500, plus the employer National Insurance and the minimum pension contributions. This is very similar to the scheme since it commenced, however from 1 July the scheme has enhanced flexibility
- The flexibility of the scheme from 1 July onward allows employers to bring previously furloughed employees back to work part-time, with the government continuing to pay 80% of wages for any of their normal hours they do not work up until the end of August. This flexibility has come in one month earlier than planned as it aims to get people back into work.
- You can decide the hours and shift patterns that your employees will work on their return and you will be responsible for paying their wages in full while working. This means that employees can work as much or as little as your business needs, with no minimum time that you can furlough staff for.
- Any working hours arrangement that you agree with your employee must cover at least one week and be confirmed to the employee in writing. We will need you to keep a track of these hours and arrangement as this information is needed for the furlough claim
- Do not worry if your employees cannot return to work or you have no work for them as you can continue to claim as you have in prior months.
August
- The government will continue to pay 80% of wages up to a cap of £2,500.
- But, employers will pay ER NICs and pension contributions – for the average claim, this represents 5% of the gross employment costs that they would have incurred if the employee had not been furloughed.
September
- The government will pay 70% of wages up to a cap of £2,187.50 for the hours the employee does not work
- Employers will pay ER NICs, pension contributions and 10% of wages to make up 80% of the total up to a cap of £2,500.
October
- The government will pay 60% of wages up to a cap of £1,875 for the hours the employee does not work
- Employers will pay ER NICs, pension contributions and 20% of wages to make up 80% of the total up to a cap of £2,500.
It is also important to note the cap on the furlough grant will be proportional to the hours not worked.
We will continue to support you during this crisis, and we will calculate all of the claims for you over the period of time. Whether this means your employees remain fully or partially furloughed we will handle this for you. We just wanted you to be aware of the scheme changes over the coming months as the employers contribution towards wages commences in August and increases gradually until the scheme is expected to cease in October 2020.
