On 12 May, Chancellor Sunak announced to the House of Commons
that the coronavirus job retention scheme (CJRS) would be extended to 31
October 2020, to provide certainty for business as the UK moves through the
crisis.
The scheme will continue in its current form until 31 July.
Changes will be made from 1 August to allow businesses to start to bring
employees back to work part-time (with the possibility of taking on additional
training during furlough), and with employers asked to pay a percentage towards
the salaries of their furloughed staff. The aim is for employers to take over
the current government contribution, to ensure that staff continue to receive
80% of their salary (subject to the £2,500 monthly cap). More detail is
expected by the end of May. As at 12 May, 7.5m employees had been furloughed
under the CJRS.
Chris Sanger, EY's head of tax policy, said: ‘The flexibility
to bring back furloughed workers part-time in “furlough 2.0” will address one
of the key constraints imposed in the first version of the scheme. This will be
particularly critical for those businesses that expect customer demand to
return slowly and hence require flexibility.
Employers being asked to pay a percentage towards the salaries
of their furloughed staff is one area where particular care will be needed,
Sanger said.
‘At a time when some businesses may be just be starting the
long journey to recovery, shifting any significant financial burden back to
employers, by too much and too soon, may undermine many of the positive effects
the furlough scheme has contributed to date. Careful consideration needs to be
given to how much businesses should be expected to share the burden, so not to
put unnecessary pressure on their already fragile operations.’
‘Business will be eagerly anticipating the fuller details at
the end of this month,’ he added.
On 12 May, Chancellor Sunak announced to the House of Commons
that the coronavirus job retention scheme (CJRS) would be extended to 31
October 2020, to provide certainty for business as the UK moves through the
crisis.
The scheme will continue in its current form until 31 July.
Changes will be made from 1 August to allow businesses to start to bring
employees back to work part-time (with the possibility of taking on additional
training during furlough), and with employers asked to pay a percentage towards
the salaries of their furloughed staff. The aim is for employers to take over
the current government contribution, to ensure that staff continue to receive
80% of their salary (subject to the £2,500 monthly cap). More detail is
expected by the end of May. As at 12 May, 7.5m employees had been furloughed
under the CJRS.
Chris Sanger, EY's head of tax policy, said: ‘The flexibility
to bring back furloughed workers part-time in “furlough 2.0” will address one
of the key constraints imposed in the first version of the scheme. This will be
particularly critical for those businesses that expect customer demand to
return slowly and hence require flexibility.
Employers being asked to pay a percentage towards the salaries
of their furloughed staff is one area where particular care will be needed,
Sanger said.
‘At a time when some businesses may be just be starting the
long journey to recovery, shifting any significant financial burden back to
employers, by too much and too soon, may undermine many of the positive effects
the furlough scheme has contributed to date. Careful consideration needs to be
given to how much businesses should be expected to share the burden, so not to
put unnecessary pressure on their already fragile operations.’
‘Business will be eagerly anticipating the fuller details at
the end of this month,’ he added.
