Workers to start getting part of furlough payments from their companies

Businesses will have to start paying towards the furlough scheme in August and the self-employed will be able to claim another grant the same month, the chancellor has announced.

The self-employment income support scheme has been extended enabling freelancers to access grants of up to £6,570 from August, announced Rishi Sunak during the daily No 10 press briefing. This will give those workers access to a total grant of up to £14,070 each during the pandemic.

From August, businesses using the Coronavirus Job Retention Scheme (CJRS) must start paying National Insurance and employer pension contributions for staff. They will also have to pay 10 per cent of furloughed wages in September, increasing to 20 per cent in October, before the scheme ends at the end of the month.

The move will not affect furloughed workers who will keep receiving 80 per cent of their wages up to £2,500 a month until October.

Visit our live blog for the latest updates: Coronavirus news live

Mr Sunak also revealed that employees can return to work part-time without losing any furlough payments from July – a month earlier than previously planned – following lobbying from businesses.

Officials said companies can be flexible with their definition of ‘part-time’ as long as a full-time employee has not returned to normal hours.

The Treasury said: ‘Individual firms will decide the hours and shift patterns their employees will work on their return, so that they can decide on the best approach for them – and will be responsible for paying their wages while in work.’

The chancellor admitted that the scheme cannot run ‘indefinitely’ as he set out new details.

Mr Sunak said: ‘Our top priority has always been to support people, protect jobs and businesses through this crisis. The furlough and self-employment schemes have been a lifeline for millions of people and businesses.

‘We stood behind Britain’s businesses and workers as we came into this crisis, and we stand behind them as we come through the other side.

‘Now, as we begin to re-open our country and kick-start our economy, these schemes will adjust to ensure those who are able to work can do so, while remaining amongst the most generous in the world.’

The Government will cover 70 per cent of wages up to £2,190 in September, with employers to pay National Insurance and pension contributions and 10 per cent of wages, representing 14 per cent of the gross employment costs.

In October, the Treasury will pick up 60 per cent of wages up to a cap of £1,875, with employers paying tax contributions and 20 per cent of wages, representing 23 per cent of the gross employment costs, the Government said.

The Treasury added that only 40 per cent of businesses had claimed the pension contributions since the scheme was launched, which has so far been used by one million businesses to support 8.5 million jobs, at a cost of £15 billion so far.

The scheme is expected to cost a total of around £80 billion, or £10 billion a month, although the Office for Budget Responsibility is set to publish detailed costs next week.

Business groups had asked the Government to ensure that those industries suffering hardest were most protected.

But the Treasury said it was not always clear which sector a business was in, insisting it would not rule out future support if required.

Mr Sunak said: ‘Now, as we begin to reopen our country and kick-start our economy, these schemes will adjust to ensure those who are able to work can do so, while remaining amongst the most generous in the world.’

The Chancellor had faced calls, including from a cross-party group of 113 MPs, to extend the scheme for self-employed workers, which has so far seen 2.3 million claims worth £6.8 billion.

The grant will be worth 70 per cent of their average monthly trading profits, paid out in a single instalment covering three months’ worth of profits, and capped at £6,570 in total.

To combat fraud, employees will be able to report any concerns to HM Revenue and Customs.

Get in touch with our news team by emailing us at webnews@metro.co.uk.

For more stories like this, check our news page.