There is still a large number of employees in the UK that are furloughed. However the furlough scheme (also known as the
Coronavirus Job Retention Scheme) is scheduled to end this year.
The furlough scheme will be fully funded by the government up to the 30 June 2021 capped at £2,500 per month. From 1 July 2021, employers are required to contribute 10% of the 80% (capped at £312.50 per month) government contributing 70% of the 80% (capped at £2,187.50 per month).
From 1 August 2021, until the scheme is due to end 30 September 2021, employer contributions rise to 20% of the 80% (capped at £625 per month) government contributing 60% of the 80% (capped at £1,875 per month).
Businesses that have struggled to fully recover from the negative effects of the pandemic, having been forced into repeated lockdowns, may be faced with difficult decisions as this September deadline approaches.
One tool that might help in the decision making process is to create a forecast of business activity – based on current estimates – that predicts likely profitability, solvency and cash flow. Armed with this information, it will then be possible to try out different what-if scenarios and consider the available options for the business.
For businesses looking to improve cash flow and not currently using Cloud accounting solutions, now might be the time to look into tools which can help improve your
business’s cash flow.
If you have concerns that you may be faced with the decision to lay off furloughed staff when the CJRS closes, and are unsure how to plan for any changes, please contact your local
Moore (South) adviser.
Employers looking for alternative routes for when furlough ends, can find options
here.