Coronavirus Job Retention Scheme and Redundancies

As part of its response to the COVID-19 pandemic, the government introduced the Coronavirus Job Retention Scheme. This scheme allowed UK companies with employees on a PAYE scheme to put some or all of their employees on furlough.

Initially the government paid 80% of the furloughed employees wages up to a monthly limit of £2,500, but from 1 July 2021 this has changed.

Whilst the monthly limit of £2,500 remains, the government’s contribution to the scheme has reduced to 70% with companies having to contribute the remaining 10%.

Companies using the scheme also need to be aware that, from 1 August to when the scheme ends on 30 September 2021, the government will contribute only 60%, with the remaining 20% being met by the employer.

One of the questions an employer will currently be asking itself is “are the contributions that need to be made, a cost that the business can afford in the current climate?”  This could lead to questions on workflow, cashflow and as a result, staffing requirements.

Often, salaries are the biggest cost to a company which is why this is the first-place employers will look to save costs.  It is important that if a decision to make redundancies is made, that professional advice is sought to ensure that redundancy entitlements have been calculated correctly and that the correct legal process is carried out to avoid any unforeseen complications.  Making redundancies at the wrong time and without specialist advice could unwittingly lead to even bigger challenges.

Whilst all companies are different, redundancies may not be the only way to help a business get back on its feet and it is important that all options are explored.  It can be key to seek the assistance and advice from a qualified, professional.  The earlier assistance is sought and the position is reviewed, the more options there are likely to be available.

Should you need any assistance or would like to discuss any of the matters covered above then please do not hesitate to contact Kim Richards on 01922 922 943 or at

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John Doe

John Doe

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