Here are United Kingdom Loans we have posted lots of information in relation to the coronavirus and the impact on finances within the UK economy over recent months. One of the key components of the support offered by the British government towards both employed and self-employed has been the furlough scheme implemented early on in the coronavirus pandemic. The furlough scheme is, however, closing to new entrants from 30th June 2020, and we, therefore, look at the scheme’s details and the specifics of the reduction in support available.
There have been some important updates regarding the furlough scheme, and it is important to recognise that the furlough scheme will soon be closing to new entrants within the United Kingdom, albeit at a reduced percentage rate, on a month-by-month basis from 30th June 2020. The furlough scheme closes to new entrants on 30th June; therefore, the last three weeks of furloughs must start on or before 10th June 2020. If employers have not furloughed an employee for three weeks by this stage, they will not be able to access the furlough scheme or put their employees on the scheme later. Employers must make claims for the period to 30th June by 31st July 2020.
Timeline of Changes
Regarding the details of the percentage support available, in June and July 2020, the Government will pay 80% of wages up to a maximum of £2500. The Government will also pay employers National Insurance and pension contributions, and it is reported that employers are not required to pay anything during June and July 2020. A positive glimmer of hope for furloughed employees is that From 1st July 2020, businesses will be given the flexibility to bring previously furloughed employees back part-time. To be eligible for the coronavirus job retention scheme (CJRS) under part-time working, employers must agree with their employees on any new flexible furloughing arrangement and confirm the agreement in writing. Employers will have to pay in full for any hours worked, including the payment of tax and national insurance contributions on those payments. There have therefore been some significant changes to the furlough scheme, which will ultimately end and reduce 70% of wages up to £2187.50 from 1st September 2020. The reduction in furlough will decrease from 1st October 2020 to 60% of wages up to £1875.
It won’t last forever!
The furlough scheme has greatly relieved many United Kingdom employers, employees and self-employed. It has enabled people to continue to access financial support through what has been a challenging time. It is hoped that once Covid-19 has reduced, the wheels of the economy will begin to turn again, albeit on a slower basis. For those employed and relying on the furloughing scheme, it is important to remain in contact with your employer to ensure you are up-to-date with any of your employee financial entitlements and that you are aware of the percentage reduction that will be implemented over subsequent months.
