Following the government’s announcement last night that lockdown is to be extended until 19 July, there was hope that the current level of financial support for businesses would be continued until lockdown is brought to an end. Unfortunately the government has confirmed that this will not be the case (although there is now intense lobbying to persuade the government to change it’s mind – we shall see!).
What then does this mean for your business in relation to the furlough scheme? On the basis that the scheme is not extended:
- Up to 30 June: You can still claim 80% of a furloughed workers wages (capped at £2,500) but must pay their pension contributions and NICs
- 1 July – 31 July: You can claim 70% of a furloughed workers wages (capped at £2,187.50) and must pay their pension contributions and NICs
- 1 August – 30 September: You can claim 60% of a furloughed workers wages (capped at £1,875) and must pay their pension contributions and NICs
Throughout you must pay the employee at least 80% of their wages (capped at £2,500), effectively requiring you to top up their furlough pay out of company funds.
Given the number of businesses who are now still required to remain closed or are severely restricted in their ability to trade until 19 July with limited or no income and no end in sight, the reality is that businesses are now going to have to look at making those furloughed workers redundant. However, redundancy does not of course come without its costs and it may well be that if the lockdown does fully end on 19 July, it would be cheaper to subsidise the furlough pay. That is though, a big ‘if’ and businesses will be weighing up the risks both ways.
For more information and to find out how we can help you, please contact us on 0345 646 0406 or fill in our online enquiry form and a member of our Team will be in touch.