The coronavirus job retention scheme, otherwise known as the furlough scheme, begins to wind down today (1 July 2021) as employers start shouldering more of the cost of furloughed employees wages.
Afford Bond Director, Paul Edwards said: “With around 1.5 million workers still on furlough, the change will affect thousands of businesses. And whilst staff will continue to receive 80% of their wages, employers now have to contribute 10% with the Government continuing to pay the other 70%, across the whole of the UK.”
From 1 August, the employer’s contribution will rise to 20% while the Government’s contribution will reduce further before the scheme ends in October.
Not all welcome the end to furlough though, with the trade union, Unite, warning its scaling back would cause “autumn misery and unemployment”.
However, the Institute of Economic Affairs dismisses such claims and argues that employment will actually pick up after a furlough which he thinks is “holding back the recovery” of UK businesses. There have also been several media reports of businesses needing to recruit more staff, so jobs are out there for the taking.
The Institute added: “With most of the economy open again, people should be encouraged to find new jobs, instead of being locked into their old ones”.
If your business needs help with financial strategic planning or expert tax guidance, please use the Contact Us form here on our website, or email Paul.Edwards@affordbond.com