The Furlough Scheme Is Changing

In May, the Government announced the furlough scheme would be extended to 30th September 2021. Both Boris Johnson and Rishi Sunak have said that there will be no further furlough scheme update or extensions. Furthermore, it is the Government view that most workers have now returned to work following the lifting of most restrictions across the UK over the past few weeks.

What do the new changes look like?  

• Workers will continue to receive 80% of their wages, up to a maximum of £2,500, until 30th September
• In August and September, you’ll need to pay 20% and the government will pay 60%

The furlough scheme has acted as a lifeline for many, saving jobs while businesses have either closed or run at a reduced capacity. The hospitality industry has been hit particularly hard, with large events like weddings cancelled or postponed. There has also been a huge decline in travel.

Business groups have called to have the scheme extended for the hardest hit industries, to prevent job loss, but it now looks unlikely.

What happens when furlough ends?  

You’ll need to pay 100% of your team’s wages and you’ll need to understand where that might leave you as a business.

If you don’t have sufficient work for your employees, then you will need to consider how best to handle this. You can’t just simply wait for the furlough scheme to end and do nothing.

Options could include:

• Consultation around changes to terms and conditions, such as hours or pay
• Consultation around proposed redundancies
• Short Time Working or Lay-Off It’s important to plan for these events now and take the appropriate HR advice and prepare accordingly.

If you would like to find out more about the Furlough Scheme Update, contact us on our contact form below. You can also read our blog on HMRC furlough compliance checks HERE to make sure you’re fully covered.