01 June 2020
In an expected announcement on 29 May, the Chancellor gave details of the second phase of the Coronavirus Job Retention Scheme (CJRS) and the equivalent support for the self-employed.
As already announced, CJRS is to be extended to 31 October 2020, with the current funding of the scheme continuing until 31 July 2020. Now we have some idea of the funding transition beyond that date and the increase in contribution that will be expected from employers.
Through August, the Government will continue to fund 80% of salary as currently, but employers will be expected to pay for Employers National Insurance and pension contributions. This is estimated at around 5% of the value of current claims.
From September employers will be expected to pay for 10% of the furloughed salary as well as the NI and pension funding, with the Government paying 70%. Through October the employer contribution will increase to 20% and the Government funding will reduce to 60%.
From 1 July, it will be possible for employers to furlough flexibly. As an example, an employer could ask an employee to work three days a week and to be furloughed for two days a week, with the employee being paid three days at their normal rate and two days at 80%. This will enable employers to achieve a gradual return to work and will assist employers in putting in place social distancing measures by not having a full work force on site all of the time.
These developments, alongside dwindling numbers of furloughed staff in the Autumn, are hoped to greatly reduce the Government’s commitment to the scheme.
The flexible furloughing will in effect be a new furlough scheme and, if employers want to furlough staff who have not previously been furloughed, they will need to do so by 10 June 2020, in order that the three week minimum furlough period can be achieved before the scheme changes on 1 July.
In an attempt to be fair to the self-employed, the current SEISS arrangement will also be extended by three months. This will enable the self-employed who have been adversely affected by Covid-19 to claim a further one-off grant to support themselves. This will be set at 70% of normal earnings, as assessed in in the first phase of the scheme, capped at £6,570 for the three months.
As with the original announcements of CJRS and SEISS, we can expect that as the details are worked through, refinements to the schemes will be made. We will ensure that our Covid-19 web section will be kept up to date with any further guidance, however, if you would like to discuss any of the Government support packages in relation to your specific situation, or would like general advice or support through Covid-19, please speak to your usual UHY contact, or get in touch with us through the Contact us section of our website.
