Good news for business as furlough scheme extended
Chancellor Rishi Sunak's announcement that the Coronavirus Job Retention Scheme is set to be extended into the autumn will come as welcome relief to businesses and organisations hit hard by the Covid-19 emergency. NEIL MOON, Director of Tax at Page Kirk, takes a look at the latest news.
The Coronavirus Job Retention Scheme has now been in place for two months and has provided a lifeline to many struggling businesses and employees during the coronavirus crisis. On 12th May, Chancellor Rishi Sunak updated the nation and informed us that the programme has now been extended until the end of October.
“We stood behind Britain's workers and businesses as we came into this crisis,” said Mr Sunak, “and we will stand behind them as we come through the other side.”
Originally, the scheme was set to run until the end of June and is already covering a quarter of the workforce. For the moment, employees will continue to receive 80% of their monthly wages from the government, up to a cap of £2,500. From August, however, there are going to be some changes.
The aim in the late summer is for there to be a greater degree of flexibility to help different sectors transition back to normal. As part of this process, furloughed employees will be able to return to work part-time. At the same point, companies will start to find they are taking more of the financial strain, as the Chancellor stated: “We will ask employers to start sharing with the Government the cost of paying people's salaries.”
At the moment, there are no details as to how the new arrangements will operate, but we are expecting to see more information at the end of May.
The update will be welcome news for many businesses, although there are particular issues for certain sectors, of course. Hair salons, barbers and pubs, for example, will not be open until at least July. Many other industries will be nervous that if they open, the demand for workers won't be there and that it will take time to get back to full capacity.
There is currently no news on support continuing for the self-employed, although we are expecting updates in the coming weeks and will keep you posted through our blogs.
The HMRC online claims portal has been open since 20th April. If you're experiencing complex issues or having difficulty making your claim, Page Kirk are of course on hand to help you. Just contact us on 0115 955 5500 or email us at enquiries@pagekirk.co.uk