[Updated 14th May 2020]
Chancellor extends furlough scheme until October
- Coronavirus Job Retention Scheme will continue until end of October
- furloughed workers across UK will continue to receive 80% of their current salary, up to £2,500
- new flexibility will be introduced from August to get employees back to work and boost economy
In a boost to millions of jobs and businesses, Rishi Sunak said the furlough scheme would be extended by a further four months with workers continuing to receive 80% of their current salary.
As we reopen the economy, we need to support people to get back to work. From the start of August, furloughed workers will be able to return to work part-time with employers being asked to pay a percentage towards the salaries of their furloughed staff.
The employer payments will substitute the contribution the government is currently making, ensuring that staff continue to receive 80% of their salary, up to £2,500 a month.
Chancellor Rishi Sunak said:
Our Coronavirus Job Retention Scheme has protected millions of jobs and businesses across the UK during the outbreak – and I’ve been clear that I want to avoid a cliff edge and get people back to work in a measured way.
This extension and the changes we are making to the scheme will give flexibility to businesses while protecting the livelihoods of the British people and our future economic prospects.
New statistics published today revealed the job retention scheme has protected 7.5 million workers and almost 1 million businesses.
The scheme will continue in its current form until the end of July and the changes to allow more flexibility will come in from the start of August. More specific details and information around its implementation will be made available by the end of this month.
The government will explore ways through which furloughed workers who wish to do additional training or learn new skills are supported during this period. It will also continue to work closely with the Devolved Administrations to ensure the scheme supports people across the Union.
The Chancellor’s decision to extend the scheme, which will continue to apply across all regions and sectors in the UK economy, comes after the government outlined its plan for the next phase of its response to the coronavirus outbreak.
The scheme is just one part of the government’s world-leading economic response to coronavirus, including an unprecedented package for the self-employed, loans and guarantees that have so far provided billions of pounds in support, tax deferrals and grants for small businesses.
A step by step guide for employers
The government have released a step by step guide explaining the information that employers need to provide to HMRC to make a claim through the Coronavirus Job Retention Scheme. It also describes the processes involved.
Find more here.
Claim for wages through the Coronavirus Job Retention Scheme
Claim for 80% of your employee’s wages plus any employer National Insurance and pension contributions, if you have put them on furlough because of coronavirus (COVID-19).
If you’re an employee you can’t claim for yourself, instead you should check if your employer can use the Coronavirus Job Retention Scheme.
To use the scheme, the steps you’ll need to take are:
- Check if you can claim.
- Calculate 80% of your employees’ wages.
- Claim for your employees’ wages.
- Report a payment in PAYE Real Time Information.
Find out more an to process claims, click here.
Under the Coronavirus Job Retention Scheme, all UK employers will be able to access support to continue paying part of their employees’ salary for those employees that would otherwise have been laid off during this crisis.
To access the scheme you will need to:
- designate affected employees as ‘furloughed workers,’ and notify your employees of this change – changing the status of employees remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation
- submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal (HMRC will set out further details on the information required)
HMRC will reimburse 80% of furloughed workers wage costs, up to a cap of £2,500 per month. HMRC are working urgently to set up a system for reimbursement. Existing systems are not set up to facilitate payments to employers.
Today the government has announced the ‘Coronavirus Job Retention Scheme’ that will support businesses in NOT laying off staff.
Chancellor Rishi Sunak has unveiled an ‘unprecedented’ economic intervention to prevent people being laid off during the coronavirus pandemic.
The Government has vowed to cover 80% of wages for at-risk workers, covering a maximum of £2,500 a month – just above the UK’s median income. The scheme will run for at least three months but can be extended if necessary and will have ‘no limit’ of funding.
The funding will come in the form of grants to cover staffs pay and it can be backdated to March 1, when the airborne virus really began to take hold of the UK.
Any employer regardless of their size will be eligible for the scheme and will have to apply through HMRC.
The Chancellor added: ‘We want to look back on this moment and remember the many small acts of kindness done by us and to us. We want to look back on this time and remember how we thought first of others and acted with decency.
‘We want to look back on this time and remember how in the face of a generation-defining moment, we undertook a collective national effort and we stood together.’
For further support and guidance at this time, please contact your local Manufacturing Growth Manager.