Chancellor outlines extended plans for furlough scheme

The Chancellor has announced that a new and more flexible furlough scheme will be in place in the UK from 1 July and that the level of grant provided will slowly be tapered from August.

Rishi Sunak revealed that from September, the Government will start covering 70% of salaries to a cap of £2,190, with employers paying 10%. From October, the Chancellor said the Government will then pay 60% to a cap of £1,875, with employers paying 20%.

Following this, the furlough scheme will then close, Sunak added.

The furlough scheme currently allows businesses to keep salaried staff who cannot work in contractual employment, while the Government pays 80% of their incomes.

Speaking at tonight’s Downing Street briefing, Sunak indicated that furloughed staff will from July be able to work part-time in their old roles, and that individual firms will decide the hours their employees will work on their return. There were, however, no plans announced to separate the furlough scheme by sector.

The Chancellor also announced new plans to extend the Self-Employment Income Support Scheme (SEISS), and confirmed that grants paid out will be worth 70% of a self-employed person's average monthly trading profits to cover three months’ worth of income, capped at £6,570.

The SEISS has so far been used by 2.6 million people and paid out £6.8bn in claims to self-employed workers who have been affected by the impact of coronavirus on the economy.

This is the second and final time that self-employed grants will be offered, Sunak confirmed, having offered the first grant to self-employed workers in March which paid 80% of average monthly trading profits, initially capped at £7,500.

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