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furlough scheme extended

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The End Of The Furlough Scheme & Extension Of The Self-Employment Income Support Scheme

There has been lots of news to keep up with over the last few days with the most important snippets being the announcement by the Chancellor Rishi Sunak that the furlough scheme will end once the October payments are made, along with news on a final grant for the self employed in August.

Furlough Scheme Extended Into October

Although the furlough scheme is being extended into October employers will find that they will be contributing more towards keeping their employees furloughed each month. There will also be some flexibility within the furlough scheme in July aimed at part-time employees.

It is also worth noting that employers will have to place any new employees on the furlough scheme before June 10th which is less than 2 weeks away.

How The Furlough Scheme Tapers Off Into October

Here are some details on how the furlough scheme will pan out over the next few months, these details have been copied from the Mortgage Solutions website:

“In June and July the government will pay 80 per cent of wages up to a cap of £2,500 as well as employer National Insurance (NICs) and pension contributions. Employers are not required to pay anything.


“In August the government will pay 80 per cent of wages up to a cap of £2,500. Employers will pay employer NICs and pension contributions. Treasury said for the average claim, this represented five per cent of the gross employment costs the employer would have incurred had the employee not been furloughed.


“In September, government will pay 70 per cent of wages up to a cap of £2,187.50. Employers will pay employer NICs and pension contributions and 10 per cent of wages to make up 80 per cent total up to a cap of £2,500. Treasury added that for the average claim, this represented 14 per cent of the gross employment costs the employer would have incurred had the employee not been furloughed.


“Finally, in October government will pay 60 per cent of wages up to a cap of £1,875. Employers will pay employer NICs and pension contributions and 20 per cent of wages to make up the 80 per cent total up to a cap of £2,500. For the average claim, this will be around 23 per cent of the gross employment costs the employer would have incurred had the employee not been furloughed.”

Self Employment Income Support Scheme Grant

As for the Self Employment Income Support Scheme those people who are eligible will be able to access a second and final grant which will be capped at £6,750 in August.

For more help and advice on the latest government measures and how it will affect you and your business get in touch with the WHR Accountancy team by calling us on 028 3752 2909.

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Furlough Scheme Extended Until October

There has been welcome news in the last few days that the government`s furlough scheme is going to be extended until October. The chancellor Rishi Sunak took this unprecedented step probably with great reluctance considering the eye-watering sum of money this is going to cost, but it had to be done to prevent huge job losses over the coming months.

Furlough Scheme Extended

7.5 Million Workers Furloughed

This extension to the scheme is a pointer as to how long the government expects this crisis to envelop the UK and the wider world. A staggering 7.5 million workers are at present being paid under this scheme but the chancellor is steadfastly standing firm by extending the scheme until October to give businesses the best opportunity to survive the crisis and keep their employees.

Sunak was quoted in an article in The Guardian as saying: “We already know that many people have lost their jobs, and it breaks my heart. We’ve seen what’s happening with universal credit claims already. This is not something that we’re going to wait to see; it’s already happening.”

He added: “There are already businesses that are shutting. There are already people who have lost their jobs. And as I said, that’s heartbreaking to me and that’s why I’m working night and day to limit the amount of job losses.”

The Cost To The Taxpayer Is Enormous

In the same article Paul Johnson, director of the Institute for Fiscal Studies, commented that the furlough scheme is likely to cost the taxpayer upwards of £80 billion:

“To put that in context, in eight months, that is more than we spend on the education system in an entire year, it’s many times what we spend on the police, it’s many times more than we spend on social care, it’s about half what we spend on the whole NHS in a year,”

Businesses Will Share The Burden As Scheme Unfolds

But of course the chancellor will be expecting businesses to contribute and share the burden as the scheme unfolds, whether the majority of businesses can or will support this remains to be seen. Here is what shadow chancellor Annaliese Dodds is quoted as saying in the same article:

“The government must clarify today when employers will be required to start making contributions, and how much they’ll be asked to pay. If every business is suddenly required to make a substantial contribution from the 1 August onwards, there is a very real risk that we will see mass redundancies.”

For help and advice on the effects of the furlough scheme on your business and how best you can negotiate the next few months, please give our experienced financial team here at WHR Accountants a call by ringing us on 028 3752 2909.