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Business difficulties after Furlough – Covid Insolvency

Business difficulties after Furlough

Business difficulties after Furlough

Commonly known as the ‘furlough scheme’, time is running out for any more businesses who want to make use of this. For the period that ended on June 30, claims must be submitted by July 31. Under the scheme, the Government will pay 80% of the wages of any furloughed employees, subject to an earnings cap of £2,500 per month. Furloughed workers are employees to whom a business has been forced to give leave of absence as they have no work to do as a result of Covid-19. New flexibility has allowed furloughed workers to return to work part-time with employers paying a percentage towards their salaries.

The scheme closes on 31 October 2020 and Government furlough assistance will end at this point.

In the meantime, it is possible to take advantage of ‘flexible furlough’ and bring employees back on a part-time basis, with the Government paying 80% of their wages for their unworked hours. Where a furloughed employee, who earns at least £520 per month, is retained until January 31 2021, the business will receive a one-off payment of £1,000 per employee.