Is your UK Payroll Ready for New Furlough Changes?

Many measures were introduced to help employers navigate the coronavirus crisis. One of the key plans implemented was the Coronavirus Job Retention Scheme. In March, the UK government began paying employees 80% of their wages to help employers furlough their employees instead of firing them. As the crisis continued, the benefits have changed. Is your payroll ready for the latest updates?

In July, the furlough scheme allowed employers to bring back workers full or part time while claiming the coronavirus job retention scheme grant for hours employees did not work. Beginning 1 August, the grant was reduced, caps were placed on proportional hours worked, and employers are required to pay National Insurance contributions for the hours employees are on furlough.

Beginning 1 September, the government will pay 70% of employee wages up to a cap of £2187.50, with employers compensating to ensure employees receive 80% of their wages up to the cap of £2500. The change from 1 October will reduce the government grant to 60% of employee wages with a cap of £1875 per month with employers paying the remaining wages up to the cap of £2500.

As the Coronavirus Job Retention Scheme ends on 31 October, these upcoming changes will impact payroll for the next several months. If your payroll system is not automatically updating with new changes, your payroll process will quickly become non-compliant with the new regulations.

Payescape has created easy-to-use payroll technology that updates each month to reflect changes to regulations. We have a CIPP-certified staff to help you ensure compliance. If you are facing challenges managing payroll or think you may have compliance issues as a result of the changes related to the furlough scheme, we can help. Click here to get started and get your payroll back on track.