UPDATED: The chancellor has set out changes that will come into play once the furlough scheme starts to wind down in July.
In the heavily trailed move, chancellor Sunak will allow furloughed workers to come back on July 1 and work part time. The Treasury will maintain the old 80 per cent scheme for those days when staff are back on furlough.
To enable the introduction of part-time furloughing, claims from July onwards will be restricted to employers currently using the scheme and previously furloughed employees.
The CJRS will close to new entrants on June 30, with the last three-week furloughs before that point commencing on June 10.
The number of employees you claim for in July cannot exceed the number you claimed for by June 30. However, it may be different if you have an employee who is returning from statutory parental leave.
As of July, the minimum number of claim days will be seven days as opposed to three weeks on the previous iteration of the scheme. The maximum number of CJRS claims will be four per month.
The first time you will be able to make claims for July is on July 1. For periods ending on or before June 30, the last day you can make claims is July 31.
Last month, Rishi Sunak announced changes to the furlough scheme affecting small business.
- August: small businesses will be expected to cover national insurance and pension contributions of workers on the Coronavirus Job Retention Scheme. For the average claim, this represents 5 per cent of the gross employment costs the employer would have incurred had the employee not been furloughed
- September: businesses will have to cover 10 per cent of the wage costs of furloughed workers on top of NI and pension contributions. For the average claim, this represents 14 per cent of the gross employment costs the employer would have incurred had the employee not been furloughed.
- October: businesses will have to cover 20 per cent of furloughed workers wage costs plus NI and pension contributions. For the average claim, this represents 23 per cent of the gross employment costs the employer would have incurred had the employee not been furloughed
Previously, it was assumed that small business owners would only be on the hook for National Insurance contributions, not pensions as well.
>See also: Small businesses will have to cover a quarter of cost of furlough
There are currently 8.4m people being paid through the state through the furlough scheme, along with another 2m receiving support through the separate self-employed scheme.
Self-employed scheme extended again
The chancellor also announced that the parallel support scheme for self-employed small business owners running alongside furlough will be extended for a second three months.
The “second and final” grant will be worth 70 per cent of average monthly trading profits, paid out in a single instalment covering three months’ worth of profits, and capped at £6,570 in total. It’ll be available from August 2020. For the second grant, you’ll have to be able to prove that your business was adversely affected by coronavirus on or after July 14 2020. You can claim for this grant even if you didn’t claim for the first one.
If you want to make a claim for the first round it must be made by July 13 2020.
Emma Jones, founder small business support network Enterprise Nation, said: “The taper is much more generous than we had expected and gives more breathing room for firms to build up custom, with an eye on November when the scheme ends.”
However, some companies have already warned that they will struggle to cover the 20 per cent of furloughed workers’ wages, however. A quarter of company directors surveyed by the Institute of Directors say they won’t be able to afford to pay even the 20 per cent of the furlough scheme if asked – as well as having to pay national insurance and pensions, a combined 10 per cent, on top.
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