Changes to Furlough Scheme Coming in August
Since the Coronavirus Job Retention Scheme was announced in March, more than 7 million workers have begun using it to replace income lost due to businesses shutting down due to the crisis. Beginning in August, there will be a change to the scheme to allow workers to return to their jobs on a part-time basis.
The government has announced that in August, businesses will have to contribute to staff pay for those that return to part-time work. No finalised plans are in place with exact figures, but it seems as though companies will contribute a certain percentage of employee pay and the government would cover the remaining pay up to the 80% threshold currently being paid up to £2500 per month for each worker.
Small businesses are concerned that they don’t yet fully understand the details of the change to the retention scheme, but the required contributions could be too expensive for some small businesses to cover – especially if there has been lost revenue due to the ongoing shutdown. The government will finalise the plans in the coming months, but employers are closely watching the changes to see the impact to their businesses.
Self-employed workers are not covered under the new change to the scheme, and no modifications have been planned for this group until July. Currently self-employed workers can receive taxable grants based on previous income earned over the last 3 years, as long as it did not exceed £50,000 annually.
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