Last Wednesday was the deadline for new applications for the Coronavirus Job Retention Scheme, commonly known by everyone as the furlough scheme. This scheme was created so that companies would not make wholesale redundancies and in the main it has worked pretty well, certainly it doesn`t bear thinking about what the economic landscape would look like now if the furlough scheme had not been swiftly introduced.
Furlough Scheme To Be Phased Out In October
As we have been told the government is going to be phasing out the scheme which will end completely in October. From August businesses will have to pay Employer National Insurance and resume pension contributions for their employees, which equates to, on average, approximately 5% of gross employment costs.
Following on from this, in September, the government will only contribute 70% of employees wages for businesses, instead of the 80% they are contributing now, capped at £2,187.50 with the other 10% to be paid by the employer.
Then in October furlough pay will be decreased by the Chancellor to 60%, capped at £1,875.00, with businesses expected to pay 20% of their employers wages to make it up to 80% of their usual monthly pay packet.
Bringing Back Part-Time Staff
One other important point to note is that from July employers will be able to bring back staff part-time without it impacting on their present furlough status.
If you manage or own a business are you ready for the changes to the furlough scheme that are coming over the horizon? Do you have a business plan to see you through the next few months to ensure you will come out the other side stronger and ready to grow?
Business Plans & Financial Projections
If not we at WHR Accountants are here to help you, we specialise in helping businesses with business plans and financial projections. So if you require any help or advice please just give our friendly team a call in the first instance by ringing us on 028 3752 2909.