New Flexible Furlough Scheme – With Changes to Contributions

UPDATE: The Government will be issuing new guidance on 12th June 2020 – Please urgently read the eligiblity below.

Today (29th May 2020), the UK Chancellor of the Exchequer Rishi Sunak has announced the much-anticipated changes in extending the Coronavirus Job Retention Scheme until the end of October 2020 and where employers will need to make a contribution.

Flexible Furlough Scheme

The Coronavirus Job Retention Scheme (CJRS) has been in place since March 2020 and, in its current form, the scheme will end on 30th June and the new scheme will be launched as of 1st July 2020.

Eligibility Criteria

• Employees need to have been placed on furlough and submitted via the current CJRS scheme before 10th June 2020
• All other criteria will remain unchanged (subject to guidance being published)

The new scheme is aimed to give the maximum amount of flexibility to employees and employers throughout the UK.

Timeline for Changes

During June/July

• No further employer contribution will be requested for the time being – Remaining at 80% throughout this period.

From 1st August

• Employer’s will expected to pay Employer National Insurance (currently 13.08%) and Employer Pension Contributions only (3% minimum).

From 1st September

• Employers will be expected to pay an additional 10% towards employers furloughed wages, with the taxpayer contributing the remaining 70%

From 1st October (the scheme’s last month)

• Employers will be expected to pay an additional 20% towards employers furloughed wages, with the taxpayer contributing the remaining 60%

After 8 months, the flexible furlough and job retention schemes will close on 31st October 2020.

Part-Time Working Introduced

From 1st July (one month earlier than planned), employer’s will be able to bring their employees back part-time and will need to pay 100% towards the time that they’re working.

An example given by the Chancellor:

e.g. 2 days back in the office, pay you for 2 days, furlough would cover you for the further 3 working days

Self Employment Scheme –

This scheme will be staying open with a final grant in August and at 70%, including other changes being announced.

Last Updated on 5 years by Hannah Ingram

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