Furlough scheme extended with part time work allowed
The furlough scheme is to be extended to the end of October, with part time work to be allowed from August, the Chancellor said this afternoon.
There will no changes to the Coronavirus Job Retention Scheme until the end of July, MPs have been told – including the rate of support remaining at 80% of salary, capped at £2,500 per month.
But from August the scheme will be modified, with “greater flexibility” enabling employers to bring workers back part-time. It’s not yet clear how many hours they would be permitted to do.
Four more months
Rishi Sunak revealed to the Commons that the scheme, which had been due to end on 30 June, will continue for an extra four months and at the same level of support as now.
Mr Sunak tweeted: “Further detail will follow by the end of May, but I want to assure people one thing won’t change:
“Workers will, through the combined efforts of government and employers, continue to receive the same level of support as they do now, at 80% of their salary, up to £2,500.”
Employers asked to 'share costs'
The Government will also now ask employers to start sharing the costs, though it is yet to reveal the specifics. More details will be released at the end of May, the Chancellor said.
There had been speculation in the last week that the rate would drop to 60% or lower, with recent warnings from the Chancellor that the scheme’s cost is so colossal that it’s unsustainable for much longer.
Some 7.5m jobs have been supported so far, and almost one million businesses helped, Mr Sunak told MPs in his statement.
Accountancy firms weigh up furlough
The Financial Times reported the Big Six had a virtual meeting organised by the ICAEW in April about potential damage to reputations if they took up the taxpayer-funded furlough scheme. BDO is the biggest accounting group to announce plans to furlough, with 700 staff having jobs frozen. Other options considered to reduce costs, but keep staff in work, have included voluntary sabbaticals or pay cuts – as Grant Thornton has introduced.
The extension of the scheme is certain to have big implications - and mean major decisions - for businesses, whether they have already made use of it or not. For those who have already furloughed some staff, they will need to assess whether to adjust their current arrangements and how this will affect their organisation. For those companies yet to use the scheme, there may be a lot of work required to get fully up to speed on the rules and implement any plans they make.
Businesses will be relying on their accountants as their trusted advisers to guide them down the right path on furlough.
How can IRIS help?
Furlough entails a huge amount of detail and a lot of work to put into practice for businesses. We understand the extra pressure it has created, and with that in mind, we’re offering support in the form of our new Furlough Assistance Service.
The Furlough Assistance Service can help with training and guidance on a one-to-one basis, so you and your team stay updated with the most recent information and changes.
In addition to the training, we can also build custom reports in your IRIS software to help you quickly calculate your furlough payments on an ongoing basis and support with filing your claims via the HMRC portal.
To book an appointment click here, but please bear in mind that we have limited availability and this service is offered purely on a first-come-first-served basis.