As you can imagine, the potential for the end of the furlough scheme has been at the forefront of the minds of lots of UK business owners this week after the Prime Minister’s address on Sunday.
I have had lots of difficult and upsetting conversations with you all about what happens if, as originally planned, it were to close at the end of next month.
What was clear in all our minds was that, if it were to be scrapped before lockdown was lifted, it would result in millions of jobs losses up and down the country.
Thankfully we can all breathe a collective sigh of relief therefore.
Today Chancellor Rishi Sunak was able to reassure employers and employees by announcing that the programme will run for further four months as coronavirus crisis continues.
What does this mean for you?
In a nutshell, this will allow you to continue to furlough workers with support from the government until the end of October.
There will be no changes in the system until the end of July – the government 80% of the wages of furloughed workers – up to £2,500 a month.
But from August the scheme – which will continue for all sectors and regions – will introduce greater flexibility for firms to bring staff back to work.
As you are all aware, under the current scheme furloughed employees cannot work so this is quite a change.
It is likely to mean employees could be furloughed part-time and employers will therefore need to “share with the government the cost of paying salaries” according to the latest announcement.
This will allow the level of state support to gradually taper away as businesses reopen and stabilise.
The devil is in the detail
We know that the scheme is currently costing the government about £14bn a month.
It is therefore unsurprising that there will be an expectation on employers to eventually share the burden furloughed workers’ wages.
However, we do not have any details on how this will take shape.
We are also in the dark about whether the support package for the self-employed - also launched to run for three months – will also be extended.
What we do know is that the furlough scheme has protected about 7.5 million jobs at almost one million companies in the UK – workers which will be needed to rebuild our economy once we come out the other side of this crisis.
How can we help you?
We will continue to support you if you make the decision to furlough any of your staff, plan to extend their furlough period or want to look at ways to bring staff back to work and share some of the salary cost.
We will be looking at the detail in any changes to the scheme as and when these are announced. We will then inform you of your options.
We can help you navigate the online portal on the HMRC website and access the benefit and ensure you adapt according to the changes to make sure you are getting the best of the benefit for both your company and your staff.