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What changes has september brought to the Furlough Scheme?
The Government's Job Retention (Furlough) Scheme is now well and truly in it's wind down phase with the final two months seeing consecutive percentage drops in Government contribution.
Find out below how this could potentially impact you and your business.....
How has the Furlough Scheme Changed Since 1st September?
The UK government’s Job Retention Scheme which pays towards the wages of staff on furlough during the coronavirus pandemic entered its next phase, earlier this week on 1st September 2020.
The government contribution has now fallen from 80% to 70% of an employee's wages up to a cap of £2,187.50 per month for the hours the employee is on furlough. The rules allow for employees to be brought back on a part-time basis, with employers paying their wages for the hours worked.
As the government contribution to furlough payments falls, employers will be required to top-up employees’ wages to ensure they continue to receive 80% of their wages up to a cap of £2,500 per month if they are on full-time furlough. Employers will therefore need to pay £312.50 in wage top-ups per employee in such instances.
Employers are now also required to pay employers National Insurance Contributions (NICs) and employer pension contributions, a change introduced on 1st August.
Employees are, as always required to pay tax, NICs and pension contributions on the money they receive through the Furlough Scheme.
What further changes will there be to the scheme in October?
From 1st October, the government's contribution will fall further to 60% of wages up to a cap of £1,875 for the hours the employee is on furlough, with employers making up the difference to the £2,500 monthly maximum. The employer contribution to wages will then be £625 a head in this instance.(Employers are able to top this up to 100% of wages at their discretion.)
Should you have any questions regarding the above, please let us know. We'd be delighted to talk to you and assist where we can.
Disclaimer: The information contained in this article is intended to be a guide and is not intended to be exhaustive. No action should be taken on the basis of information contained herein without obtaining the necessary advice. No responsibility can be accepted for loss or damages occasioned to any person acting or refraining from acting as a result of the material contained herein.
