From 1st July businesses will be allowed to bring back furloughed employees part-time, which is a month earlier than previously announced. Employers will then be able to set the hours and shift patterns that staff work but companies will have to pay their wages whilst they are working.
The level of government grant will then be reduced from 1st August where furloughed workers will continue to receive 80% of their pay however, from this point it will include a growing employer contribution. It will start with firms paying National Insurance and pension contributions plus 10% of staff wages in September and rising to 20% in October.
Businesses who may find themselves recovering due to limited profits post-lockdown will be grateful of this gradual easing of the furlough scheme that has helped millions. It will allow businesses to recover some finances as the economy starts to re-open and recover slowly.
There are some industries who feel this will affect them more than others, the Hospitality industry for example where revenues will be drastically cut for the foreseeable future, may need additional support from the government or face going out of business.
Balancing further government expenditure against the livelihood of millions of people is a difficult act and the government may need to consider stepping in if the situation worsens. They will need to support those businesses who simply cannot afford to keep their staff on due to the impact felt from the lockdown period and provide a support network for those who may potentially lose their jobs.
The government also announced further support for the self-employed who will now receive a second and final grant in August which will pay 80% of their income. More than 2 million people have applied for the single grant of up to £7,500 so far. The chancellor announced last week that applications for a second grant can be applied for up until 13 July.
This news will be greatly welcomed and many businesses will be relieved that this second grant will be available to them. With more and more businesses being able to return to work, it is important to not forget those who are still unable to continue their operations, this announcement by the government will offer these companies some assurance.
For further information on the schemes and guidance available to all businesses please visit our Coronavirus Business Support Hub.