Government provides clarification on Job Retention Scheme until 31 October 2020

At the end of last week, the Chancellor announced changes to the Job Retention Scheme.

Whilst we await the fine detail, the key points announced were as follows:

  • JRS cannot continue indefinitely but will remain open until end of October. Employees will continue to receive the full 80%.
  • A new more flexible furlough scheme will start from 1 July 2020 – one month earlier than announced a few weeks ago.
    • Providing maximum flexibility – employees can come back part-time.
    • The final date on which an employer can furlough an employee for the first time is 10 June 2020.
    • Employers will have until the 31 July to make claims in respect of period end 30 June 2020.
  • Final phase of the furlough scheme will ask employers to contribute:
    • From August – employers will only pay the Employers NIC and Employers Pension Contributions.
    • From September – employers will need to contribute 10%.
    • From October – employers will then need to contribute 20%.
    • The scheme will then close on 31 October 2020.

The Chancellor referred to taking careful, but deliberate steps to re-open the economy and a need to adapt to a new environment. He acknowledged that the current scheme could not continue indefinitely but recognised that employers need to be protected. This gradual phasing for employers from 1 August is welcomed and leaves the employees position intact. We will, of course update when further details are available.

Update: Following publication of this update, a factsheet was issued by HMRC and an analysis of this can be found here.