Furlough & self employment support schemes update

Charlotte Morley
Apr 9, 2021

Rishi Sunak, the Chancellor, has now announced further details about the extension of the Coronavirus Job retention (Furlough) and Self Employed Income Support schemes.

We’ve set out the main points of the extension and what changes this will bring for businesses.

Self-Employment Income Support Scheme

Eligible self-employed people will be able to claim a second and final SEISS grant in August; this will be a taxable grant worth 70% of their average monthly trading profits for three months, paid out in a single instalment and capped at £6,570 in total

Coronavirus Job Retention Scheme

Three changes to the job retention scheme:

1.    From 1st July 2020, the scheme will be made more flexible to enable employers to bring previously furloughed employees back part time and still receive a grant for the time when they are not working. See more below, under “Part time furloughing”.

2.    From 1st August 2020, employers will have to start contributing to the wage costs of paying their furloughed staff and this employer contribution will gradually increase in September and October. See more below, under “Employer contributions”.

3.    The scheme will close to new entrants from 30 June.

Part time furloughing
From 1 July 2020, businesses using the scheme will have the flexibility to bring previously furloughed employees back to work part time. Employers will decide the hours their employees will work on their return and will be responsible for paying their wages in full while working. This means that employees can work as much or as little as the business needs, with no minimum time that they can furlough staff for. The government will continue to pay 80% of wages for any normal hours not worked up until the end of August

Any working hours arrangement agreed between a business and their employee must cover at least one week and be confirmed to the employee in writing. When claiming the CJRS grant for furloughed hours, they will need to report and claim for a minimum period of a week. Employers will be required to submit data on the usual hours an employee would be expected to work in a claim period and actual hours worked.

If employees 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 the grant for their full hours under the existing rules.

Employer contributions
From August, the government grant provided through the job retention scheme will be slowly tapered.

•    in June and July, the government will pay 80% of wages up to a cap of £2,500 as well as employer National Insurance (ER NICs) and pension contributions for the hours the employee doesn’t work – employers will have to pay employees for the hours they work
•    in 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
•    in 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
•    in 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
•    the cap on the furlough grant will be proportional to the hours not worked.

We will publish further updates and information as soon as we have it, via our blog or email updates for our clients. You can keep up to date via email or by following any of our social media.

In the meantime, if you have any questions about the scheme or anything else, please get in touch. You can also refer to our COVID-19 support page.

Thanks for stopping by,

The Business Hut Team

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