What SMEs need to know before furlough winds up on September 30

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The Coronavirus Job Retention Scheme (furlough) is coming to an end. Here’s what you need to know. 

Read time: 3 minutes

  • Businesses can respond in three ways

  • Government support remains available 

  • Furlough scheme to cost £66 billion

The Coronavirus Job Retention Scheme, which protected millions of jobs during the pandemic, will come to a close at the end of the month. 

Employers have three options after 30 September 2021: Bring furloughed staff back to work on their existing terms and conditions; terminate their employment (redundancy rules apply); or agree with employees any changes to terms and conditions of employment. 

“When employers are making decisions about how and when to end furlough arrangements, equality and discrimination laws will apply in the usual way,” states guidance from HMRC. 

Chancellor Rishi Sunak’s new support mechanism, Plan for Jobs, incentivises employers who successfully bring furloughed staff back through the new Job Retention Bonus. HMRC guidance explains: “If you’re an employer and you bring someone back who was furloughed - and you continuously employ them through to January – we will pay you a £1,000 bonus per employee.” 

The Government’s Recovery Loan Scheme also remains available to businesses of any size until 31 December 2021. Up to £10 million is available per business, though the actual amount offered and terms are at the discretion of lenders. The government guarantees 80% of the finance to the lender. As the borrower, you remain 100% liable for the debt.

In July 2021, the number of people on furlough fell to the lowest level since the start of the pandemic, according to the latest figures from HMRC. Around 340,000 people moved off furlough across the UK over the course of the month, with a total of 1.6 million people on furlough as of 31 July, down from almost two million on 30 June. 

Since it was put in place in March 2020, the Coronavirus Job Retention Scheme has supported 11.5 million jobs. The Office for Budget Responsibility estimates that the cost of furlough will come to about £66 billion, covering the period between March 2020 to the end of September 2021. 

The information contained in this article is correct at the time of publishing. We recommend that you carry out your own independent research to understand how exporting after the end of the transition period will affect you and your business.

We have pulled the resources on this page together for you to help with your independent research and business decisions. This page contains link(s) to third party websites and resources that we (Barclays) are not providing or recommending to you.

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