Here’s What You Need To Know About The Job Retention Scheme
With the Coronavirus Job Retention Scheme or ‘furlough’ scheme coming to an end in October, the UK Government has announced a plan to prevent mass job losses as businesses emerge to a post-lockdown world amidst the coronavirus pandemic.
What is the Job Retention Scheme?
Chancellor Rishi Sunak has unveiled plans for a Job Retention Bonus, designed to encourage business to keep on furloughed workers. Under the scheme, the government will pay a £1,000 furlough bonus per employee to employers who keep furloughed employees in work until the end of January 2021.
“It’s vital people aren’t just returning just for the sake of it – they need to be doing decent work,” said Sunak, in his Plans For Jobs speech to the House of Commons in early July. “So for businesses to get the bonus, the employee must be paid at least £520 on average in each month from November to the end of January – the equivalent of the lower earnings limit in National Insurance.”
How will the Job Retention Bonus affect my cash flow?
Many business owners will now be looking at reopening and deciding the best route for their business post-lockdown. The difficult decision between bringing staff back from furlough or making redundancies has likely become even more complex with the announcement of the furlough bonus.
You may be asking – is it worth it to bring this employee back? Will the £1,000 make enough of a difference? Is the timing difference between bringing them back and getting paid the bonus significant enough to make a difference?
To help you answer these questions and calculate if the Job Retention Scheme is right for you, we recommend diving into the scenario planning feature in Float and exploring your potential options.
You can create up to four different scenarios and plan as far ahead as receiving the furlough bonus payment in February, or even beyond, to work out what the right move is for your business. Use the scenario layers to weigh up the differences between bringing some, all or just a handful of your staff back from furlough and see the impact these decisions will have on your cash position.
Once you’ve decided the right approach for your business, you can add the scenario to your existing cash flow forecast at the click of a button.
Give Float a try today, with a 14-day free trial.