The current furlough scheme is coming to an end, after being in place for over seven months – and many people are wondering what happens next as the coronavirus pandemic continues to battle UK businesses.
In September, Chancellor Rishi Sunak addressed this, saying: ‘It is clear that even businesses that can stay open are facing profound uncertainty.’
So, he introduced the Job Support Scheme to replace the current furlough scheme.
But when does furlough end, and what support is available for businesses and employees afterwards?
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When does the current furlough scheme end?
The current furlough scheme ends today – Saturday, October 31.
The scheme was first announced on March 23, the day the UK went into national lockdown.
7.5% of the workforce was receiving support from the Government between October 5 and 18, which would be equivalent to more than two million people, according to the Office of National Statistics.
What support is available after furlough? The Job Support Scheme explained
The Government has announced that the Job Support Scheme will replace the current furlough scheme on November 1.
The scheme will protect employees’ wages and support businesses that have been affected by the ongoing coronavirus pandemic.
Accommodation, hospitality, and leisure businesses that have seen takings drastically fall due to lockdown restrictions will be able to get up to £2,100 for every month they are under tier two rules.
The new government-issued grants will be retrospective, meaning they will cover any business affected by lockdown restrictions since August.
Tier three businesses that have been damaged by the lockdown can already apply for a grant of £3,000 per month.
What income support is available to employees?
Employees from businesses that are forced to close due to lockdown restrictions are entitled to two-thirds of their normal salary where they can’t work for a week or more. The government will cover 100% of those costs.
To qualify, you must have been on your work’s payroll since September 23.
Through JSS Open, the government will also contribute towards the pay of employees who can work during the pandemic, but not their usual number of hours.
The employee will need to work a minimum of 20% of their usual hours and the employer will continue to pay them as normal for the hours worked.
The employee will then also receive 66.67% of their normal pay for the hours not worked.
The employer will pay 5% of the salary for the hours not worked, and the government will pay the remainder of 61.67%, up to a maximum of £1,541.75 per month.
This will ensure employees continue to receive at least 73% of their normal wages
The UK government is also giving firms:
- £1,000 for every furloughed employee kept on until at least the end of January
- £1,500 for every out-of-work 16-24 year-old given a ‘high quality’ six-month work placement
- £2,000 for every under-25 apprentice taken on until the end of January, or £1,500 for over-25s
What support is available to self-employed people in the Job Support Scheme?
The Government will offer self-employed grants across all tiers, meaning the maximum grant will now be £3,750.
An additional second grant will also be available for self-employed workers to cover February 2021 to the end of April.
It has not yet been confirmed how much this second grant will cover.
Who is eligible for the Job Support Scheme and self-employed grants?
Employers will be able to access the Job Support Scheme if they have enrolled for PAYE online, and they have a UK, Channel Island or Isle of Man bank account.
The JSS Open scheme applies to all Small and Medium-sized Enterprises (SMEs) with UK accounts. Large businesses (with 250 or more employees on their payroll) are only eligible if they can prove that their turnover is reduced because of Covid-19.
The self-employed grants are available for all self-employed people, regardless of the tier they are in, who’ve stopped trading or have a significant fall in trade.
However, only those who were already eligible for the previous SEISS grants can apply – you don’t have to have applied for any previous SEISS grants.
To be eligible, you must have filed a tax return for 2018/19, earn more than 50% of your total income from self-employment and your average trading profit must be no more than £50,000/yr.
You also must be currently actively trading to be eligible for the self-employment grants.
When will the Job Support Scheme end?
The scheme will run for at least six months, a little less than the seven-month original furlough scheme.
That means it will end in May 2021.
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