Chancellor outlines future of the job retention scheme

1 Jun 2020 02:17 PM

Increased flexibility for the JRS and extending protection for the self-employed announced by the Chancellor.

The Government has announced the roadmap for the future job retention scheme (commonly referred to as the furlough scheme or JRS) which was extended until October earlier this month.  

The JRS currently allows businesses to claim 80% of their employees’ wages (up to £2500 per month) from the Government. The scheme has been widely used by employers with ONS figures on 28 May showing 79% of businesses in the UK have applied for access to the Coronavirus Job Retention Scheme. 

Over the course of the next four months the JRS will continue with businesses gradually asked to contribute more to the costs of the scheme, while increased flexibility is introduced.  

The Government also announced a second round of the Self-Employment Income Support Scheme (SEISS). Self-employed workers will be able to claim another grant worth 70% of their average monthly trading profits, paid out in a single instalment covering three months’, and capped at £6,570. Applications for the second grant will open in August 

As the Government’s most widely used economic support measure the JRS is vital for priming the economy for the recovery once the public health crisis is under control. techUK has supported calls for increased flexibility for the scheme as well as the continuation of the SEISS to ensure that businesses, employees and the self-employed are supported.  

Changes announced by the Chancellor on Friday 29 May include:

Extension terms of the Job Retention Scheme

• June and July: The government will continue to pay 80% of wages up to a cap of £2,500 as well as employer National Insurance (ER NICS) and pension contributions. Employers are not required to pay anything. 
• August: The government will pay 80% of wages up to a cap of £2,500. Employers will pay ER NICs and pension contributions. 
• September: The government will pay 70% of wages up to a cap of £2,187.50. Employers will pay ER NICs and pension contributions and 10% of wages to make up 80% total up to a cap of £2,500.  
• October: The government will pay 60% of wages up to a cap of £1,875. Employers will pay ER NICs and pension contributions and 20% of wages to make up 80% total up to a cap of £2,500.  
• The JRS will close to new entrants on 30 June, with the last three-week furloughs before that point commencing on 10 June. 

Flexible Furlough 

• From 1 July, employers will be able to agree any working arrangements with previously furloughed employees. 
• When claiming the JRS grant for furloughed hours; employers will need to report and claim for a minimum period of a week, for grants to be calculated accurately across working patterns. 
• Claims for flexible furloughing will only be available for those already on the scheme. Employers who wish to bring staff back on a flexible basis will need to make sure relevant employees are registered before the JRS closes to new applicants on 30 June 

Second round of the Self-Employment Income Support Scheme (SEISS) 

• Individuals can continue to apply for the first SEISS grant until 13 July. Under the first grant, eligible individuals can claim a taxable grant worth 80% of their average monthly trading profits, paid out in a single instalment covering three months’ worth of profits, and capped at £7,500 in total. Those eligible have the money paid into their bank account within six working days of completing a claim. 
• Applications for the second grant will open in August. Individuals will be able to claim a second taxable grant worth 70% of their average monthly trading profits, paid out in a single instalment covering three months’ worth of profits, and capped at £6,570 in total. 
• The eligibility criteria are the same for both grants, and individuals will need to confirm that their business has been adversely affected by coronavirus. An individual does not need to have claimed the first grant to receive the second grant. Further guidance on the second grant will be published by the Government on Friday 12 June. 

We will continue to provide updates as more information becomes available, so please regularly check techUK’s COVID-19 information hub.  

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