Skip to main content

Chancellor announces flexible furlough scheme detail

The Chancellor Rishi Sunak has today announced more details on the furlough scheme, allowing employers to bring back staff on a part-time basis from 1st July instead of 1st August.

In June and July, the scheme will continue as before with no employer contribution at all.

The government will pay 80% of furloughed people’s wages, up to a maximum of £2,500. At the same time, the Flexible Furlough will start  on 1st July, one month early.

In August, the taxpayer contribution to people’s wages will stay at 80%. Employers will only be asked to cover National Insurance and employer pension contributions which, for the average claim, accounts for just 5% of total employment costs.

By September, employers will have had the opportunity to make changes to their workplaces and business practices. Only then, in the final 2 months of the 8-month scheme, will employers be asked to contribute 10% towards people’s salaries with taxpayers paying the other 70%.

In October, taxpayers will pay 60%, and employers will contribute 20%. Then, after eight months of this extraordinary intervention of the government stepping in to help pay people’s wages, the scheme will close.

From July 1st, employers will have complete flexibility to decide on the right arrangements for them and their staff. For instance, you could bring back staff for two days a week. As an employer, you pay them for the two days and the furlough scheme covers the other three.

To introduce this new, flexible furlough from July 1st, the old scheme will close to new entrants on June 30th. Employers wanting to place new employees on the scheme will need to do so by June 10th, to allow time to complete the minimum furlough period before then.