On 30th September 2021, the UK’s Coronavirus Job Retention Scheme, better known as furlough, officially ended.
Boris Johnson’s daily coronavirus briefings now feel like a distant memory. But for payroll teams across the UK, Rishi Sunak’s announcement of the furlough scheme will never be forgotten. The scheme helped pay the nation’s wages while businesses faced closures and significant changes during the pandemic.
When was the furlough scheme announced?
Furlough was first announced on 20th March 2020. Employers and payroll bureaus were told they could claim a grant for 80% of the wages employees are not working, aka ‘on furlough’. 
During lockdowns this came as a lifeline for many businesses who were forced to close or had to reduce their service until the Government deemed it safe for them to operate again.
“When Rishi first announced the introduction of the furlough scheme, my initial feeling was one of shock. It seemed like such a monumental step for the government to be paying 80% of people’s wages.
It made it really hit home how serious and very real covid-19 had become and how far-reaching the effects would be. The realisation that this was going to be a task that we would be intrinsic in operating was daunting. However, it was very motivational to know that we could support our clients through such a difficult time.” Katy, Head of Payroll
Despite being announced on 20th March, it was to be backdated from 1st March 2020, meaning that those responsible for submitting the claims had to bring themselves up to speed pretty quickly.
“It was definitely a juggling act having two school-aged children suddenly home and needing to be schooled, as well as trying to get my head around a brand new furlough scheme.
My priorities shifted; overnight we had a second desk set up in my home office so I could help my children with their work whilst doing my own. While they got on with work, attended live classes and had PE with the nation’s favourite PE teacher, Joe Wicks, I would be reading up on the guidance, making spreadsheets to calculate everything and doing my normal payroll work.
Payroll and ensuring employees are paid is one of the most important aspects of a business and the furlough scheme became the backbone to this for many companies. We wanted to make sure that what we could advise and process for our clients was correct and as up-to-date as possible.” Jenna, Senior Payroll Processor
How many people did the furlough scheme help?
Since the start of the pandemic, the scheme supported an estimated 11.6 million UK workers. By September 2021, nearly one million workers were still on furlough.
For many clients, the scheme was essential in helping them adapt without facing immediate redundancies.
Client Story: Olives Et Al Ltd
When lockdown hit, Olives Et Al Ltd saw trade come to a near standstill. They furloughed over 70% of their workforce, with most employees remaining on furlough for an entire year. Throughout this period, they received 80% of their usual pay.
When the flexible furlough scheme launched on 1st July 2020, they gradually reintroduced staff part-time as lockdown restrictions eased.
Learning how to calculate flexible furlough pay for employees with variable hours presented another challenge for payroll teams. They had to implement an additional procedure to ensure calculations were accurate and efficient.
The process involved determining an employee’s ‘usual working hours.’ Payroll teams did this by comparing the average hours worked across the previous tax year with the hours worked during the same pay period in that tax year. They had to recalculate this each month, as the number of hours varied.
These complex calculations made it difficult for business owners to plan ahead. It was also challenging for employees to understand how their furlough pay had been calculated.
To help, we provided extra telephone and email support to our clients. We also shared video messages from our Head of Payroll, Katy, who explained the legislation in simpler terms. This support not only benefited our clients but also helped them assist their employees.
“Furlough was a lifeboat for our company as sales dropped by 60% virtually overnight in lockdown. The flexibility and longevity of the scheme allowed us to avoid making any redundancies and maintain our loyal and close-knit workforce.
Portt & Co took all the worries of processing furlough away from us. We avoided having to deal with any complexity and could focus on the survival of the business. Katy in particular was always available and very helpful whenever we had any queries – of which there were many in those first few months!” Viki Jackson, Olives Et Al
At Portt & Co, we’ve helped our clients to claim £3,269,382.74 through the scheme to pay their employees, with numbers of employees on furlough fluctuating from almost 250 to our last claim for just 23 in September.
Outsourcing your payroll
Submitting furlough payments would have opened many business owner’s eyes to the complexities that processing payroll brings.
Outsourcing payroll is not only less time consuming for business owners, but also more cost effective and means you can stay compliant with HMRC.
If you would like to know more about our specialist outsourced payroll services, complete our easy form and we will get in touch to find out more about your requirements.