The current furloughing scheme, more formally known as the Job Retention Scheme, will cease on 30 June 2020 to be replaced by a “new scheme” with the same name commencing the following day. But the majority of business and the majority of employees will see little change until the end of August.
It is a little misleading to call this a new scheme, it is just a revision to the old one. And one that was trailed well in advance. The tapering of the relief is nowhere near as many had interpreted the Chancellor’s earlier comments to imply and introduces from 1 July the JRS’ FFS by which employers have complete freedom to bring staff off and off the scheme as they wish on a part-time basis.
There is one important date which may have been missed by some in Friday’s announcement, Wednesday 10 June. To be eligible for the new scheme an employee must be on, or have been on, the JRS by this date. The reason for this disparity? 10 June is three weeks in before the closure of the old scheme and therefore ensures the employee in question has qualified as eligible under the old scheme rules.
The easiest way to work through the changes is to follow a timeline.
10 June – deadline for employees to have participated in the JRS;
1 July – flexible furlough provisions come into force;
August – employers will become liable for the ERs NIC and pension contributions of furloughed employees. Up until that date this cost has been funded by the scheme;
September – employers can claim for 70% not 80% of the cost of the furloughed employee up to a maximum £2,187.50 per employee;
October – employers can claim for 60% of the cost of the furloughed employee up to a maximum £1,875 per employee;
31 October – the JRS ends.
The approximate cost of the tapering for employers is as follows:
August – 5% of the gross costs of the furloughed employee;
September – 14% of the gross costs of the furloughed employee;
October – 23% of the gross costs of the furloughed employee
The Treasury will issue further practical guidance on 12 June in the meantime further details can be found here.
