On Tuesday [12 May] the Chancellor announced that the “furlough scheme” – more formerly referred to as the Coronavirus Job Retention Scheme (CJRS) – would be extended for a further four months until the end of October 2020.

Before this announcement, the scheme was due to run until 30 June, having already been extended from 31 May.

During this additional four months, the scheme continues to apply to all sectors and regions of the country. However, as the Chancellor explained, there will be greater flexibility to support the transition back to work for employees and businesses, and furloughed employees could be brought back to work on a part-time basis.

The rationale for announcing these changes was to avoid a “cliff edge” in which employers began to make redundancies.

One notable comment by the Chancellor was the scheme could not continue in its current form and that from 1 August 2020, the Government would begin to ask businesses to begin sharing the cost.

Exactly what that means has yet to be revealed, but further detail relating to the extended furlough scheme is to be released later this month.

In general, it should be considered as a welcomed extension that provides more relief to businesses and employees, together with the opportunity to deliver a structured recovery and return to work plan.

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