UK furlough scheme to put more of burden on employers from August

By

Sandra Halliday

Published
May 29, 2020

Retailers and fashion firms will find themselves under heavier pressure from August with UK chancellor Rishi Sunak having announced on Friday that employers will have to pay part of the wages of furloughed staff.

As the lockdown is eased and the economy reopens, business will start to function again, but those with staff still furloughed could find themselves facing a cash crunch as they have to contribute to the wages bill.

From August they’ll have to pay employer national insurance and pension contributions for staff. Then they’ll 10% of furloughed staff salaries in September, and 20% in October. But the news isn’t as bad as it could have been with the government believed to have been mulling making a 30% contribution from employers mandatory.

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The government has also recognised the problems businesses might have in getting back to full functionality and companies will be allowed to take furloughed staff back on a part-time basis from July.

The government also extended its scheme supporting self employed people, but at a lower level. And the extension still fails to include those previously earning £50,000 and over whose earnings could well have disappeared, as well as directors of limited companies, and the newly self-employed.