Chancellor extends Furlough Scheme to October | moneyfacts.co.uk

Michelle Monck

Michelle Monck

Consumer Finance Expert
Published: 12/05/2020

Rishi Sunak has announced today that the Coronavirus Job Retention Scheme, more commonly known as the Furlough Scheme has been extended to the end of October.


The scheme was set to finish in May and currently pays 80% up to £2,500 per month of employees’ wages that are on the scheme. The Chancellor announced that there are currently 7.5 million workers on the scheme, across nearly 1 million businesses.


The furlough scheme will remain in its current form for all industries across the UK until the end of July 2020. From August 2020 until the end of October 2020 the scheme will then allow more flexibility to businesses, including allowing employers to bring back already furloughed employees on a part-time basis.
The Chancellor also confirmed that the 80% level of support will not be changing.

Why is the Furlough Scheme changing?

The Government is changing the Furlough Scheme as it encourages specific sections of businesses to return to work if they can do so safely and they cannot work from home.


The current scheme only allows employees to be completely furloughed and does not allow for reduced hours or part-time working. Some businesses are wanting to be able to utilise staff but on reduced hours as they respond to rising demand as the lockdown reduces.


It is estimated that the scheme has an expected cost of up to £8 billion.

Has the Self-Employment Income Support Scheme (SEISS) changed?

The Chancellor did not announce any changes to SEISS today. The self-employed can now receive a taxable grant of 80% of their average trading profits up to a maximum value of £7,500.


HMRC will notify those self-employed businesses that are eligible to make a claim. Payments can be expected by 25 May or within six working days of completing a claim.

What are the SEISS eligibility requirements?

Eligible self-employed businesses will need to be trading in the 2018/19 and 2019/20 tax-years, have trading profits no greater than £50,000 per year and submitted a Self Assessment before 23 April 2020 for the 2018/19 tax year.


Self-employed workers can check their eligibility using the HMRC SEISS calculator.

 

Business finance support

Businesses that struggling due to the Coronavirus pandemic can seek business finance from the Coronavirus Business Interruption Loans Scheme and Bounce-back loans. A commercial loans broker can also help to review your options.


Those that pay business rates and receive Small Business Rate Relief may also qualify for a Small Business Grant Fund.

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