Guidance for British Luxury Businesses – Update on the Job Retention Scheme and new flexible furlough
Here we share official guidance surrounding the financial support available for British luxury businesses from the UK government and also and wider guidance on topics and issues relevant to the Coronavirus outbreak. Today, we share details of the extended Job Retention Scheme and flexible furlough.
Earlier this month Chancellor of the Exchequer, Rishi Sunak announced that the Coronavirus Job Retention Scheme (JRS) would be extended in its current form until the end of July after which it would evolve to offer employers greater flexibility to bring employees back to work on a part-time basis as businesses reopen.
Today there were further updates about how the scheme will operate from August to October, the key features are as follows:
– In June and July, the scheme will continue as before, with no employer contribution at all – furloughed employees can receive 80% of their salary up to £2,500 per month.
– In August, the taxpayer contribution to people’s wages will stay at 80%, employers will be asked to pay National Insurance and employer pension contributions, which for the average claim, account for an estimated 5% of total employment costs.
– By September, employers will be asked to start contributing further with the government paying 70% of the furlough grant and employers contributing 10%.
– In October, the government will pay 60%, and employers will be asked to contribute 20%.
– The scheme is then expected to close at the end of October, eight months after it opened.
As anticipated, it was also announced that the JRS would adapt to become more flexible and enable employers to bring their furloughed employees back to work in a phased way if they choose to do so.
From July 1st, employers will have the flexibility to decide on the right arrangements for them and their furloughed staff. This means that an employer may, for example, choose to bring a furloughed employee back to work two days per week and the JRS would continue to cover their salary for the remaining three days.
To take part in the new flexible furlough arrangement, employers must place new employees on the scheme by June 10th and the old scheme will be closed new entrants on June 30th.
Walpole welcomes an extension to the JRS, which has been a lifeline for some British luxury businesses since the Coronavirus outbreak and feedback from members indicated that a more flexible scheme with the ability to gradually bring employees back to work based on business needs is a positive.
However, we know that the deadline of the end of October for the scheme to close will be daunting for some members, particularly travel, retail and hospitality brands, who have been hardest hit by the pandemic. Walpole will continue to press the government and other stakeholders on provisions for these sectors beyond October and will publish further details and guidance on the new measures outlined today as they become available.