Furlough may be cut to 60% as Sunak hints at extension

6th May 2020
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Around 6.3million staff in Britain have been furloughed.

There has been a huge uptake in the Coronavirus Job Retention Scheme, which was designed to prevent immediate mass unemployment.

But there are concerns that it is simply unsustainable in its current form, with half of the adult population estimated to be on it now.

It’s reportedly costing the Government – and taxpayer - approximately £40bn to cover 80 per cent of wages, up to £2,500 a month, between April and June, for those placed on the scheme.

The Government is now trying to decide how to “wind it down”, with the end date currently set at June.

However, the Chancellor Rishi Sunak has assured workers and employers “there will be no cliff edge”, indicating the scheme may be extended past June.

And other media reports today suggested it could simply be changed, rather than axed, from July onwards to pay a lower figure, such as 60% instead.

Keeping fully on top of so much detail, with the measures under constant review, and potentially changing again in a few weeks, could be quite overwhelming for many firms, consuming a huge amount of time and resources.

Some of the complications and common challenges already encountered include:

Employee contracts: Furlough leave calculations can vary significantly when dealing with full-time employees, varied weekly hours and zero-hour contracts.

Deductions: When calculating furlough payments, you must consider National Insurance pro-rata payments and Employer Pension Contributions.

How can IRIS help?

IRIS has launched the new Furlough Assistance Service because we understand the pressure furloughing has placed on businesses. This can help with training and guidance on a one-to-one basis, so you can stay updated with the most recent information and changes.

In addition to the training, we can also build custom reports to help quickly calculate furlough payments on an ongoing basis and support with filing claims via the HMRC portal.

For more information and to book an appointment click here.

We are also running webinars with the latest updates on each Tuesday and Thursday. Click here to register interest.