CORONAVIRUS – JOB RETENTION SCHEME EXTENDED UNTIL OCTOBER 2020

 

This evening, the Chancellor has announced that the Coronavirus Job Retention Scheme will be extended for four further months until October 2020.

 

The scheme, launched in March 2020 in order to safeguard jobs for staff members who would otherwise be made redundant due to the Covid-19 outbreak, originally allowed for furloughed applications from 01 March to the end of May.

 

It was further extended to the end of June and tonight, in a radical step aimed at maintaining employment levels across the economic landscape despite what is a certain technical recession, until the end of October 2020.

 

This represents an additional four months to the existing scheme structure, however the scheme format is changing during this period in two crucial ways.

 

Firstly, the scheme presently offers to fund 80% of furloughed employees’ salaries up to a cap of £2,500 per month. The employer can choose to top up the balancing 20% but are not obliged to.

 

However, from August 2020, employers will be asked to contribute to the furlough payments; in effect, this offers a reduction from the original 80% – potentially down to as little as 40%.

 

However, presently staff members on the furlough scheme must not complete any work. That is to say, they are furloughed on a full-time basis.

 

By the point of repayment percentage reduction in August, changes to the scheme will be allowed that make provision for part-time work; meaning that the employee could return to work for part of the week and be in furlough for the remainder. This is in effect a phased return to work.

 

The government is yet to confirm the precise details on this adjusted percentage or the specifics of the phased return, but as soon as they do we will report these on this website section.

 

If you have any queries regarding the changes to the scheme and how this affects your business, contact our expert team for support.

 

Best wishes,

Alan

Alan Wright
Coronavirus Support Team
Switch Accountants