Changes to furlough and self employment income protection schemes

The Government has announced a tapering of its furlough scheme for employed workers, and an extension of the Self-Employment Income Support Scheme (SEISS).

Finance

 

No change for the next two months

Chancellor Rishi Sunak announced on Friday that for the next two months, until the end of July 2020, the furlough scheme will continue on the same basis – with the Government paying 80% of wages up to  a cap of £2,500.

Changes being phased in

During August the furlough scheme will continue, but employers will be asked to pay national insurance and employer pension contributions.

In September, employers will be asked to pay 10% of wages and the Government will pay 70%. In October, the last month for the scheme, employers will pay 20% and the Government 60%. After this time the scheme will close

Flexible furlough

Sunak also announced plans for a flexible furlough scheme from 1st July under which employers can bring people back part time, on a few days a week with the Government topping up the rest of their wages. In order to put this in place, he announced that the furlough scheme would close to new joiners at the end of June, so employers wanting to place new employees on the scheme will need to do so by 10th June to allow time for them to complete the minimum furlough period of 3 weeks before this deadline.

Self Employment Income Support Scheme

The Government has said that in August self-employed people eligible for SEISS will be able to claim 70 per cent of their average trading profits (up to a cap of £6,570) for the months of June, July and August.

The Association of Independent Professionals and the Self-Employed (IPSE) has welcomed the announcement, but warned that the government has “patently forgotten” groups like limited company directors and the newly self-employed and urged it to do more for them.

Andy Chamberlain, Director of Policy at IPSE, said: “It will be an overwhelming relief for many self-employed people that the government has heeded our calls and extended SEISS. The scheme is a vital lifeline for millions of people and it is absolutely right that the Government keeps it running.

“It is fair that, as with the Job Retention Scheme, the Government has tapered the support on offer for the self-employed. However, it is disappointing that there will still be two months when employees can access support and the self-employed cannot. The Government should watch the situation carefully and be ready to step in if the UK’s self-employed need more support.

He added: “It is also vital that the Government does not ignore the self-employed who cannot access this scheme. At the moment, groups like freelancers working through limited companies and the newly self-employed have patently been forgotten. We urge the Government to consider these groups and also help them through the coming months.”



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