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The Coronavirus Job Retention Scheme is expected to go through drastic changes in the coming months. The knock-on effect is that you could witness an increase in your staff costs.
Below, we outline the key dates and changes that you need to remember. Plus, we provide advice on how to keep your overheads under control as the furlough scheme winds down.
June 30th: Furlough scheme closes to new entrants
Remember, while June 30th is the official closing date, you must have put someone on furlough on or before June 10th to claim your grants.
July 1st: Launch of ‘part-time furlough’
From July 1st, you can make use of ‘flexible furlough’, meaning you can bring employees back part-time and still claim grants to cover part of their wages.
For example, you can choose to bring back an employee who usually works five days a week for two days a week. You’ll pay for those two days as normal, but the scheme will continue to cover some of their wages for the other three working days.
Throughout this process, it’s important that you record your employees’ hours carefully when they’re on part-time furlough, as you’ll need to report this accurately.
You’ll also need to keep this data secure for at least five years to meet government guidance. HMRC has the right to retrospectively audit your business and will expect to see this info.
August 1st: Employer contributions hit
From August 1st, you will need to pay National Insurance (NI) contributions and employer’s pension contributions on furloughed employee’s wages.
However, the Government will still cover 80% of furloughed employees’ wage costs (minus your contributions), up to £2,500 per employee per month. There’s also no requirement for you to top this up to 100% if you don’t want to.
September 1st: Contributions increase to 10%
From September 1st, you must contribute 10% towards the 80% of a furloughed employee’s wages (up to £2,500 per month), on top of NI and pension contributions. The Government will fund 70% of employees’ wages up to £2,190 per month.
October 1st: Contributions increase to 20%
From the start of October, you’ll need to contribute 20% towards the 80% of a furloughed employee’s wages (up to £2,500 per month), plus NI and pension contributions. The Government will fund 60% of their wages up to £1,875 per month.
October 31st: Furlough scheme ends
As long as no further extensions are announced, the Coronavirus Job Retention Scheme will close. You will get no further funding for staff after this date.