The Coronavirus job retention scheme: extension to October 2020 and other changes

The Chancellor has announced an extension of the furlough scheme.

The key details are:

• The end date of the scheme has been extended from 30 June 2020 to 31 October 2020 – providing eight months of support in total from the start date of 1 March 2020.
• No changes will be made to the scheme up to the end of July 2020.  The claim by employers continues to be for up to £2,500 per employee (plus associated employer pension and national insurance payments) and furloughed employees continue to be unable to carry out any work for their employer whatsoever.
• Between 1 August and 31 October 2020, furloughed employees can return to work part-time and the employer will still be eligible to claim a grant for them.
  This is part of the staged withdrawal of the furlough scheme and assumes that the government’s plans for employees being able to return to their workplace will have progressed in the next couple of months.
• The overall support to employees will continue to be the lower of 80% or £2,500 but this cost will be shared with employers.

There is no further information around what proportion of the cost of the furlough scheme will be shared with employers but early rumours leading up to today indicated that the government would cover 60%. This implies that, to be eligible to claim the grant from 1 August 2020, employers would need to meet the cost of 20% of the payments to furloughed employees.

Further details will be released by the end of May 2020.

For further guidance on all aspects of the furlough scheme, we are here to help. This includes assessing eligibility, calculating the amount of grant due to employers and making the claims through the HMRC portal.