Almost 3 million people have moved off the United Kingdom’s coronavirus job retention scheme (CJRS) since March and fewer than 2 million people remain on furlough, HM Treasury said.
While new data show that more than half a million people left the furlough scheme in June alone, surveys conducted by the Office for National Statistics show that numbers may have fallen even further, Treasury added in a July 29 release.
HM Revenue & Customs introduced the CJRS and the self-employment income support scheme (SEISS) in March 2020 as part of a package to protect jobs and businesses dealing with the economic impact of COVID-19.
“It’s fantastic to see businesses across the U.K. open, employees returning to work, and the numbers of furloughed jobs falling to their lowest levels since the scheme began,” Chancellor of the Exchequer Rishi Sunak said.
Treasury said the CJRS figures published by HMRC, which cover claims submitted by employers up to June 30, show “a striking fall” in the number of young people on furlough. The takeup rates for the youngest age bands decreased dramatically in June and are now in line with the other age bands, and the reduction is “in line with the easing of restrictions across the U.K., particularly in hospitality,” HMRC said.
“Jobs in sectors including hospitality and retail are now also moving off the scheme the fastest — with more than a million coming off the scheme in the last three months,” Treasury said. The scheme is set to end September 30.
HMRC said there were 540,000 employers with 1.9 million staff on furlough on June 30. Since the start of the CJRS in March 2020, a total of 11.6 million jobs have been put on furlough for “at least part of the duration” of the scheme.
HMRC guidance updated on July 15 noted that the government committed to pay 70 percent of a furloughed employee’s wages from July 1, and 60 percent from August 1. The government’s contributions are subject to a cap that is proportional to the hours not worked. For each month, employers are required to “top up employees’ wages to make sure they receive 80 percent of their wages (up to £2,500) for the hours they are on furlough,” HMRC said.
BBC News quoted Tom Waters, senior research economist at the Institute for Fiscal Studies, as saying that there was no way to know exactly how many jobs would have been lost, and for how long, if the furlough scheme had not been introduced. "But given that unemployment has only risen slightly since the start of the pandemic, despite the biggest fall in GDP ever recorded, I think it's fair to say that furlough has had a very significant impact on job retention," Waters said.
“The number of furloughed employees has fallen below two million for the first time as the economy continues to reopen. But that is higher than many expected, and a cause for concern as the scheme is wound down,” Charlie McCurdy, economist at the Resolution Foundation, said in a release. “With employer contributions to furloughed staff doubling from this Sunday, and the scheme ending completely in just two months’ time, it’s vital that as many furloughed staff as possible return to work soon, in order to limit the rise in unemployment this autumn.”
HMRC’s figures show how “some sectors are still struggling to reopen, with around half of all staff in air passenger transport and travel agencies still on furlough,” the Resolution Foundation noted.
SEISS
The online service for the fifth SEISS grant is available, HMRC announced on July 28. Self-employed taxpayers, including members of a partnership, are invited to file claims if they think their business profits “will be impacted by coronavirus” between May and September.
For the first time, claimants will need to consider a “financial impact declaration” test based on the extent to which turnover has reduced in a specified period. A correction to the terms of the test was set out in a Treasury Direction published on July 29.
The Association of Taxation Technicians and the Low Incomes Tax Reform Group have published details on the rules for the fifth grant.