Government Support Update

Three major changes to support due to the Corona Virus pandemic have been announced today, 29th May 2020 by the Chancellor Rishi Sunak.

Employers to start paying share of furlough scheme

Furloughed workers will continue to receive 80% of their pay, but from August it will include a growing employer contribution. It will start with employers paying NI and pensions in August, plus 10% of pay in September, rising to 20% in October.

During August the government will pay 80% of wages up to a cap of £2,500. Employers will have to pay NI and pension contributions. For the average claim, that’s 5% of the gross employment costs the employer would have incurred had the employee had not been furloughed.

In September, the government will cut its grants to 70% of wages up to a cap of £2,190. Employers will pay NI and pension contributions and 10% of wages to make up the 80% total up to a cap of £2,500. That works out at 14% of the average gross employment costs the employer would have incurred.

In October the government grant will be cut to 60% of wages up to a cap of £1,875. Employers will pay NI and pension contributions and 20% of wages to make up the 80% total up to a cap of £2,500. That’s 23% of the gross employment costs the employer would have incurred had the employee not been furloughed.Fl

Flexible Furlough Scheme Announced

From 1 July 2020 businesses will be allowed to bring furloughed employees back part-time, a month earlier than previously announced. The move is aimed to help support people back to work.

It will be down to individual firms to decide what part-time means. They will be able to set the hours and shift patterns staff will work when they return, but companies will have to pay 100 per cent of wages while they’re in work. The rest of their salary can be claimed via the furlough scheme up to the allowance as per the details above.

The Self Employed Income Support Scheme Extended

Those eligible for the Self-Employment Income Support Scheme (SEISS) will be able to claim the additional grant in August, which will be worth 70% of their average monthly trading profits, capped at £6,570 overall. The money will again be paid out in a single installment covering June, July and August.
Applications for the second grant will open in August.

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