Two weeks ago, Rishi Sunak announced that companies would have to start contributing to the Coronavirus Job Retention Scheme that has been keeping many people employed. A few days ago the Chancellor provided some more details about the forthcoming changes. If you run a business, here's a rundown of the most important points that the Chancellor announced.

No new entrants

The furlough scheme will be closed to new entrants on the 30th June, with the last-three week furlough period commencing on 10th June.

The end of the scheme in October

Sunak confirmed that the furlough scheme would close in its entirety on the 31st October.

Businesses will need to share the cost

Starting from the 1st of August, businesses will need to start contributing to insurance pensions.

Self employment extended

Sunak announced that the Self Employment Income Support Scheme will be extended. The second and final grant would be capped at £6,570.

Here's a breakdown of how the Coronavirus Job Retention Scheme will look in the forthcoming months:

June and July

The government will continue to pay 80% of wages (capped at £2,500) as well as national insurance and pension contributions. Employers do not have to pay anything. There will be no new entrants after the 10th June.

August

The government will continue to pay 80% of wages (capped at £2,500). Employers will pay national contributions and pension contributions. Figures suggest that this will be around 5% of the gross employment costs that would have incurred if the employee was not furloughed.

September

The government will continue to pay 70% of wages (capped at £2,187.50). Employers will pay national contributions, pension contributions and the other 10% of wages to make up the 80%. Figures suggest that this will be around 15% of the gross employment costs that would have incurred if the employee was not furloughed.

October

The government will continue to pay 60% of wages (capped at £1,875). Employers will pay national contributions, pension contributions and the other 20% of wages to make up the 80%. Figures suggest that this will be around 23% of the gross employment costs that would have incurred if the employee was not furloughed.

November

After the 31st October, the Coronavirus Job Retention Scheme will close.

Inevitably, some businesses will struggle to pay these costs in such a cratered economy. Freezing pay, reducing hours and flexible working are just some of the practices that businesses may need to adopt if they are to make it through this difficult episode. We'll keep you posted of changes that occur and what your business can do to offset these.

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