In his speech to Parliament, billed as a Summer Economic Update, the Chancellor laid out his plans to protect, support and create jobs.
Although many of the new measures he outlined were not aimed at directly assisting contractors, one measure stood out – the Job Retention Bonus.
Although Rishi Sunak quickly confirmed that the existing Coronavirus Job Retention Scheme (CJRS) would still end in October, he said that it was important that people who have been furloughed are supported back to work.
To help encourage employers to retain staff, the Job Retention Bonus will introduce a one-off payment of £1,000 to UK employers for every furloughed employee who remains continuously employed through to the end of January 2021.
To benefit from this payment, employees must be on the payroll continuously and earn above the Lower Earnings Limit (£520 per month) on average between the end of the Coronavirus Job Retention Scheme and the end of January 2021. Businesses that retain previously furloughed employees will receive payments in February 2021.
It is understood that this scheme will also be available to contractors who operate as an employee via their own Personal Service Company, who have been furloughed during the CJRS, as well as any other individuals that they employ and who have been furloughed.
PLEASE NOTE THAT THIS NEW GRANT ONLY APPLIES WHERE A DIRECTOR OR EMPLOYEE WAS FURLOUGHED AT SOME POINT BEFORE 30 JUNE 2020.
The furlough scheme continues to be one of the few financial support measures available to contractors.
Cogent will continue to help our clients at this difficult time and will provide the service of applying for this final Job Retention grant for client companies.