Sunday, 07 June 2020 16:22

Don’t miss 10 June deadline for furlough support Featured

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Employers only have until 10 June to furlough staff that have not yet been part of the Coronavirus Job Retention Scheme (CJRS). That’s because employees need to be on furlough for at least three weeks prior to the closing date for new entrants on 30 June.

After that, the scheme will only be available to employers that have previously furloughed their employees.

The good news is, people can start coming back to work part time from 1 July (a month earlier than anticipated) and receive financial support for the hours they’ve lost. Employers will set and pay for part-time hours, while the furlough scheme fills in some of the financial gap for the hours they’d normally work. There’s more detail to come from the government next week, but employees will still have to be furloughed by the 10 June deadline to qualify.

“It’s easy to get caught out on this,” said Paul Garrod, owner and director of Garrod Beckett. “Most people are aware that the scheme is due to come to an end in October, but you might not realise you have to enrol any new employees by next week to qualify for the payments. So, you’ve got to get your skates on!

“Another consideration is that from 1 August, employers will have to start contributing to the salaries of their furloughed staff, so costs will start to ramp up. If you haven’t already furloughed your staff, you could find yourself having to make difficult and costly decisions about redundancy further down the line.

Our advice is to ensure you have a clear picture of your cash flow as soon as possible. You’ll need to take into account the gradual reduction of furlough support from August, and the effect it will have on the financial health of your business in the near to medium future. You can use our free Business Equation Tool to forecast the cost  based on the different assumptions of your staff being on or off furlough.

Key dates for the Coronavirus Job Retention Scheme:

  • 10 June - the scheme will close to new entrants
  • From 1 July - employers can bring back employees to work part-time. Any claim under CJRS will be limited to regular hours not worked
  • June/July 2020 – the government will continue to pay 80% of costs up to the £2,500 cap
  • August 2020 – the government will pay 80% of wages up to the £2,500 cap, but employers will have to cover employers’ NIC and pension costs for the hours the employee does not work
  • September 2020 – the government will pay 70% of wages up to a reduced £2,187.50 cap. Employers will pay employers, pension costs and 10% of wages to a total cap of £2,500
  • October 2020 - the government will pay 60% of wages up to a reduced £1,875 cap. Employers will pay employers’ NIC, pension costs and 20% of wages to a total cap of £2,500
  • The cap will be proportional to hours not worked

Paul continued: “Spending time looking at cash flow might not be high on your priority list but it’s the number one way to protect your business through this crisis. We know it can be complicated and it’s tempting to bury your head in the sand, so please reach out for help by getting in touch. The sooner you tackle your cash flow, the clearer you’ll be about what support you need from the furlough scheme or available loans to help get you get back on track.”

To book a free, no obligation chat, email This email address is being protected from spambots. You need JavaScript enabled to view it.

 

Read 1095 times Last modified on Sunday, 07 June 2020 16:50

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