Meaning that small businesses will have to fork out £833 per month to keep each staff member on furlough if they’re claiming the full £2,500 amount.
According to accountancy firm Wellers, this would cost an additional £245.73 per month, bringing the monthly total for each furloughed employee to over £1,000 a month.
However, the government will still cover the cost of pension contributions. Previously, Bloomberg reported that the Treasury was considering asking businesses to cover both national insurance and pensions.
What’s being floated today goes much further.
The fear is that many small businesses, especially those in leisure and hospitality, will be forced to throw staff onto the unemployment scrapheap, as the Treasury effectively ends the Coronavirus Job Retention Scheme (CJRS) in August, not October.
The hospitality sector, which will be the very last sector to reopen, estimates that 2m jobs will be lost as workers come off the furlough scheme.
However, as Small Business revealed, furloughed workers will be allowed to be taken back on part-time immediately. Shops have been allowed to reopen from June 1 but with a cratered economy and uncertain demand, shopkeepers do not know whether they can justify bringing somebody back full time.
More than eight million people have been furloughed, equivalent to one third of the private sector workforce. The Office for Budget Responsibility has said the job retention scheme could end up costing the taxpayer up to £80bn.