29 May 2020: Updates to Furlough and Self-Employment Grants

The Chancellor announced that changes were coming to the Coronavirus Job Retention Scheme some time ago, so we’ve been waiting for updates for a while.

We knew the scheme was extending to 31 October 2020, and that there would be some part-time furlough, but that’s all we knew. So Friday’s announcements were very welcome.

**Please see our latest blog with more detail on how the flexible furlough will work from 1 July 2020

1. Furlough Grant Scheme changes (Coronavirus Job Retention Scheme: CJRS)

Employers will be expected to contribute towards furlough as follows:

We’ve been waiting a few weeks for more detail around the furlough extension to 31 October 2020, and what flexible furlough means, so this is what we know today:

  • August 2020: employers will be expected to pay employers’ NIC and employers’ pension contributions. 80% furlough grant remains for gross pay
  • September 2020: employers expected to also pay 10% of gross pay (furlough grant will be 70% – capped at £2,187.50)
  • October 2020: employers expected to pay 20% of gross pay (furlough grant will be 60% – capped at £1,8750.00)
  • No new employees can be added to the furlough scheme after 30 June 2020

Flexible furlough:

  • From 1 July 2020 employers can part-furlough their employees, so that they can start making the right decisions to get their business back up and running.
  • It is up to employers to decide hours and shift patterns
  • A minimum of one week is required for each part-time furlough period
  • For example, a full time furloughed employee can work for 2 days per week, paid by the employer, and the Government will pay the furlough grant for the remaining 3 days per week, as above.

Furlough scheme will end 31 October 2020

2. Self-Employed Income Support Scheme (SEISS) Grant Extended

  • This is now extended from 31 May 2020 to 31 August 2020
  • You will be able to claim in August 2020
  • The grant will be 70% of your average profits, in line with the furlough grant (above) reducing
  • Grant will be capped at £6,570 for the 3 months to 31 August 2020, or £2,190 per month
  • We’re assuming the 70% will be calculated on the same average profits as the previous grant (3 years to 2019)
  • To calculate your grant, take the grant you received in May and divide by 80 and multiply by 70 to get your new grant (this guidance is based on the information we currently have)

More info from HMRC here:

Government update on self-employed grant and furlough grant.

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Book in a 30 minute zoom call with me.

Stay safe. Stay strong.

Sharon x