Furlough extension scheme

12th May 2020

The Chancellor has announced today that the Employee Job Retention Scheme will now be extended till October 2020. This scheme was originally designed to last until June 2020. This scheme has had a huge level of take up with employers. The Treasury have estimated that some 7.5 million workers are now covered by Employee Job Retention Scheme.

By way of a reminder the scheme, is designed to cover the costs of employees who have been furloughed as a result of the current crisis. The employer will receive the lower of 80% of the furloughed employee’s salary or £2,500, this is paid by way of a taxable grant.

The scheme will continue in its current guise up until August 2020. From then on, the Chancellor announced that greater flexibility will be introduced into the scheme, in order to assist with the transition back to work.

It is understood that from August employers will have the option to bring back furloughed employees to return to work on a part time basis. It does appear though that if an employer wishes to do this they will need to share part of the cost of the salaries for these staff members. No guidance as to how the cost will be shared has been released at this stage. What has been confirmed is that the existing thresholds of 80% and £2,500 will remain unchanged.

More detail on how the extension is expected to work should be available towards the end of this month. We will provide updates on any important changes as and when they arise.

The scheme is already in operation and we are making claims on behalf of clients who are now already in receipt of their first payments from HMRC.

Should you wish for any assistance in making applications under this scheme please do not hesitate to contact us.

In respect of the similar furlough scheme for self-employed individuals, clients are now getting ready to submit applications. Following today’s announcement, we anticipate possible changes to this scheme and will provide further details in due course.


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