With nearly nine million workers furloughed by more than a million employers, the government has decided to call time on the Coronavirus Job Retention Scheme. It will end on 31 October and for the final three months the subsidy – which has already cost more than £17 billion – will gradually be reduced.
The wage subsidy is 80% of pay (up to a maximum of £2,500 a month), but from August employers will have to pay NI and pension contributions. From September
employees on furlough will continue to get 80% of pay, but the state will only pay 70%, leaving the 10% balance to be paid by the employer. From October the
government contribution will fall to 60%, with 20% from the employer. The upper limit of £2,500 a month for those earning more than £37,500 a year will remain.
From 1 July employees can combine work at full pay with furlough on 80% of pay. Employers must keep detailed records of which days employees work and which days they are furloughed – on those days they may not do any work for their employer. Only people who have already been furloughed for at least three weeks between 1 March and 30 June are eligible. Employers must inform employees about the new arrangements in writing and keep records for five years.
Employees on furlough can be asked to take leave, provided they are given notice twice as long as the period of leave – for example two weeks’ notice for one week’s leave. The employer can claim the furlough grant for periods of leave but must make up pay to 100%.
By the end of May HMRC had received 1,900 reports of employers breaking furlough rules. The Revenue has powers to recover grants from employers who have cheated the scheme and may also impose penalties.
More information Find the nine guidance documents at gov.uk. Search “coronavirus job retention scheme”.
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