As the Chancellor announces an extension to the existing Coronavirus Job Retention Scheme, Philip Sayers, solicitor in Coodes’ Employment team explains what it will mean for businesses and employees.
The ongoing effects of the COVID-19 pandemic was always going to be top of the agenda during the Chancellor’s Budget announcement today (3 March 2021). One of the main priorities of the Budget, and for the Government, was the extension of the Coronavirus Job Retention Scheme, commonly known as the furlough scheme.
The furlough scheme has once again been extended as many businesses remain closed, in light of ongoing restrictions due to the pandemic. Although it was due to finish at the end of April, the Chancellor has now said the scheme will run until the end of September 2021. This will continue to offer financial support to businesses and protect jobs and livelihoods as the country begins to unlock in the weeks and months ahead.
More support has also been offered to self-employed people until the end of September, with access to grants widened, meaning more than 600,000 additional people will now be eligible.
What is the furlough scheme?
The Coronavirus Job Retention Scheme was actually launched almost a year ago as part of the Coronavirus Act 2020. It has since been extended a number of times over the past year, as the pandemic has continued to have a devastating effect on people and businesses.
The scheme is designed to offer temporary financial relief and help stave off large scale job losses. It allows employers to put their employees on furloughed leave, while HMRC reimburses the business 80 percent of the employee’s wages, up to £2,500 a month.
More than 11 million people have benefited from the scheme since its inception in March 2020.
What differences can business expect?
While the Chancellor assured furloughed workers that they will continue to receive 80 percent of their wages, he did announce some changes to the scheme for employers.
From now until June, there will be no changes. However, in July, employers will be expected to pay a 10 percent contribution towards their staff’s furloughed hours. In August and September, they will have to pay 20 percent towards those hours, as the economy continues to reopen, as per the Government’s roadmap out of lockdown.
During this difficult time, Coodes Solicitors is here to support you. We can offer you advice on the Coronavirus Job Retention Scheme and other business support available, and how it can help your company, alongside a range of other employment matters.
For more information or advice, please contact the Employment team at Coodes Solicitors: 0800 328 3282 or email@example.com