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Update to the Coronavirus Job Retention Scheme (Furlough)

Chancellor Rishi Sunak, extends furlough scheme until October 2020

The government’s Coronavirus Job Retention Scheme will remain in place until the end of October, the Chancellor, Rishi Sunak, announced today (12th May 2020).

The government’s Coronavirus Job Retention Scheme will remain in place until the end of October, the Chancellor, Rishi Sunak, announced today (12th May 2020).

Following the launch of the Coronavirus Job Retention Scheme in March, nearly a quarter of all workers in Britain were furloughed by their employers, within the first two weeks of its launch. Under the recent advice being given by UK Government, this scheme was marked for being phased out by the end of June.

However, today’s announcement in Parliament, by Chancellor Rishi Sunak, the subsidy for workers wages will be extended until October 2020.

Under the furloughing programme, employees will continue to receive:

  • Coronavirus Job Retention Scheme will continue until end of October
  • furloughed workers across UK will continue to receive 80% of their current salary, up to £2,500
  • new flexibility will be introduced from August to get employees back to work and boost economy

The scheme will continue in its current form until the end of July, but new changes coming in at the start of August, will allow more flexibility. Unlike the current system that prohibits furloughed workers from engaging in any work with the company, from the start of August, furloughed workers will be able to return to work part-time; employers will be asked to pay a percentage towards the salaries of their furloughed staff.

The employer payments will substitute the contribution the government is currently making, while at the same time ensure that staff continue to receive 80% of their salary, up to £2,500 a month.

You can read more about it here.

How does the Coronavirus Job Retention Scheme/Furloughing affect your future R&D Tax Credit claim?

As staff wages make up an important part of the R&D Tax Credit calculation, any salaries paid to staff whilst on furlough will need to be omitted from the final calculated costs.

As with all decisions that we make in relation to our businesses, it’s vital to weigh up the benefits. We would be happy to discuss your specific situation and advise on the best way to maximise your future R&D Tax Credits claim.

Call Fiscale Today!

Why not contact us today to discuss your business’ R&D tax relief? It only takes our team around 20 minutes to determine if you are eligible or not.