• Jon Shatford

Changes to the Covid-19 Furlough Scheme

New Month, More changes to be considered by employers affected by the Covid-19 Pandemic. For the last few months the government has been paying towards the cost of keeping jobs open in businesses that have been impacted by the Covid 19 Pandemic. it started with 80% (subject to HMRC Cap) of salary and paying employers NI and Pensions Costs, this reduced on 1st August, with employers now having to pay their own NI and Pension contributions.

As of this morning (1st September), employers now have to continue to pay no less than 80% (subject to HMRC Cap) of the employee's salary (prior to COVID) but only able to reclaim 70% (subject to HMRC Cap), with the balance of the payment coming from the P&L.

Although this may come to a shock to some employers, it also important to remember that we need to manage the expectations of those job-holders in these affected businesses, would it not be better to have those conversations about sustainability of roles in affected businesses. Although these conversations can be challenging, if a business is continuing to suffer then re-structuring may be a better alternative to state aid.

Further changes to the Furlough scheme come into force on 1st October, with the employee continuing to receive no less than 80% (subject to HMRC Cap) of their salary, with the employer being able to reclaim just 60% (subject to HMRC Cap). The chancellor continues to stand by his position, that there will be no extension to the scheme.

For information on the furlough scheme or assistance in any way with your payroll, why not call Jon on 01488 853193.

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