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What the revamped furlough scheme means for your small business

What the revamped furlough scheme means for your small business


From August, small businesses will have to cover 20% of furloughed staff wages plus NI and pensions

As expected, Rishi Sunak has announced changes to the furlough scheme affecting small business.

  • From August, small businesses will be expected to cover national insurance and pension contributions of workers on the Coranvirus Job Retention Scheme
  • From September, businesses will have to cover 10 per cent of the wage costs of furloughed workers on top of NI and pension contributions
  • From October, businesses will have to cover 20 per cent of furloughed workers wage costs plus NI and pension contributions

Previously, it was assumed that small business owners would only be on the hook for National Insurance contributions, not pensions as well.

>See also: Small businesses will have to cover a quarter of cost of furlough

In the heavily trailed move, chancellor Sunak will allow furloughed workers to come back on July 1 and work part time. The Treasury will maintain the old 80 per cent scheme for those days when staff are back on furlough.

There are currently 8.4m people being paid through the state through the furlough scheme, along with another 2m receiving support through the separate self-employed scheme.

Self-employed scheme extended again

The chancellor also announced that the parallel support scheme for self-employed small business owners running alongside furlough will be extended for a second three months.

As before, a single grant – this time at a reduced level of £6,570 – will be paid to self-employed workers covering a three-month period. This is equivalent to 70 per cent of the previous level of payment at £7,500.

However, some companies have already warned that they will struggle to cover even the 20 per cent of furloughed workers’ wages, however. A quarter of company directors surveyed by the Institute of Directors say they won’t be able to afford to pay even the 20 per cent of the furlough scheme if asked – as well as having to pay national insurance and pensions, a combined 10 per cent, on top.

Further reading

Self-employed Income Support Scheme what it means for you



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