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Furlough Scheme Update & Actions from TC Group

The Chancellor this afternoon announced changes to the Government’s furlough scheme, extending it in its current form until the end of July, with additional changes being made for August to October. As with previous announcements, today’s was lacking in solid details, and more information will follow in due course.

However, at this stage, the immediate action you as a business owner need to take is to send a letter to your furloughed staff extending their furlough leave until 31st July.  Our TC HR department can provide you with this extension letter if you have signed up for our COVID-19 HR contract.In addition to the extension of the scheme in its current form, the Chancellor has made some further announcements that will come into effect from 1st August, all of which will require further clarification before you take any action. These are: 

  • Furlough Scheme extended from the end of July until the end of October;
  • Employer contributions – The Government have confirmed that the payment to employees will continue at 80% of normal salary level but have said they will ask businesses to share the cost of this, so there are some question marks over whether business owners will be required to contribute and the level of the contribution;
  • Part-Time Furloughed Employees – This will be employees returning from furlough and working reduced hours and remaining furloughed for the remainder of the week – It is unlikely that the Government will pay the furloughed salary at the current 80% rate and so employer contributions may be required. 

Next steps:

  • Detailed guidance will be released by the end of May and we will send you a summary as soon as we have reviewed it;
  • You will then have 2 full months to review and implement your furlough strategy in line with the latest guidance and our HR team can talk you through your options and advise on the best solution for you;
  • There will be a number of options available to you that will need careful consideration including phased returns to work, reduction in working hours, short-time working, part-time furloughing or even possible redundancies.   

As previously mentioned, the furlough scheme has already changed multiple times and that will continue to happen as the Government has to adapt to the economic needs of the country. The furlough scheme is one of the UK’s main fiscal responses to COVID-19 and will become increasingly complex with each iteration particularly when combined with part-time workers and other return to work obligations that will soon be placed upon business owners. If you haven’t already we would encourage you to speak to our Head of HR Wendy McGarvey whose team of HR experts can support you with a discounted support package that will cover everything you need during this period including return-to-work advice and staff template letters that comply with the latest guidance. 

Honorary Accountants to the Chamber.

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