Is your business ready for Brexit? The UK left the European Union on 31 January 2020 and entered a transition period which is due to end on 31 December 2020.
Chancellor, Rishi Sunak has announced further details on how the extension of the furlough scheme for employees will be paid in the coming months.
The furlough scheme has been extended until October, however from August employers must pay National Insurance and pension contributions, then 10% of pay from September, rising to 20% in October.
Workers will also be allowed to return to work part-time from July, but with companies paying 100% of wages.
Around 8.4 million workers are currently having 80% of their salaries paid for by the government up to £2,500 a month under the current furlough scheme. The scheme was intended to last until the end of July, but Mr Sunak has now extended this until the end of October, but he also noted it was not his intention to ‘switch the furlough scheme back on’.
Employers’ claims under the scheme have reached £15bn so far. However, the Chancellor expects the scheme to cost a total of around £80bn, or £10bn a month.
The graph below clearly shows how this will work.
Credit for image: BBC Business.