Job Retention Scheme Update

Adam Pritchard

By Adam Pritchard
June 5, 2020

The Job Retention Scheme was initially intended to cease on 30 June 2020 but has unsurprisingly been extended.

Rishi Sunak, Chancellor of the Exchequer, has proposed a number of changes that will taper the relief over the coming months up to the end of October as the world slowly re-opens.

From 1 July 2020, employers can bring back to work employees who have been previously furloughed for any amount of time and any shift pattern whilst still being able to claim the Job Retention Scheme Grant for their normal hours not worked.

When claiming the grant employers will need to report and claim for a minimum period of one week.

The scheme will close to new entrants from 30 June 2020 and from this point onwards employers will only be able to furlough employees that they have furloughed for a full three weeks prior to 30 June 2020.

This means the deadline for furloughing employees is effectively 10 June 2020.


Increasing costs to employers



From the 1 August employers will be required to meet part of the cost of employing furloughed workers.

The Government will still pay 80% of wages up to a maximum of £2,500 but employers will be asked to pay employers national insurance and pension contributions.

For the average claim this represents 5% of the employment costs had the employee not been furloughed.



By September the government will reduce the fiscal support provided to businesses and only cover 70% of wages up to a cap of £2,187.50.

Employers will have to make up the additional 10% of wages and continue to pay employers national insurance and pension contributions.

This represents 14% of the total cost of employment had the employee not been furloughed.



The Government will pay 60% of wages up to a cap of £1,875.

Employers will pay 20% of the wages to make up 80% of the normal gross up to a maximum of £2,500.

This represents 23% of the total costs of employment had the employee not been furloughed.



The Coronavirus Job Retention Scheme currently costs the treasury £6 billion per month. The scheme could end up costing as much over one year as the NHS with nearly 50% of the working population furloughed. Moreover, although the hospitality and leisure sectors are set to be the last sectors to reopen, Rishi Sunak has refused to provide support on a sector-by-sector basis.

The gradual withdrawal of support is aimed at weening UK businesses off the government support that has been so enthusiastically embraced by desperate and frustrated business owners.

It is hoped that enabling people to return to work gradually will help businesses get back on their own two feet.

If you have any questions regarding this Job Retention Scheme update please feel free to get in touch with us. Our team is more than happy to answer them for you.