It feels like quite a lot has changed since we wrote our blog last month and there are definite signs of some things starting to return to normal. Summer has also well and truly arrived, which for us here in Cornwall would normally mark the start of the busiest time for businesses and events but which will feel a little different this year.

Furlough scheme

With many more businesses reopening this month, more employees have returned to work and have come off the Job Retention Scheme. On 1st July, the flexible furlough scheme started which means employees can return to work part time and still remain on furlough for the hours they are not working.  This carries on through August as well, with the government still picking up 80% of the wages of employees on furlough.

From September, the amount the government will cover reduces to 70% and in October, the final month of the scheme, the amount reduces to 60%. The Coronavirus Job Retention Scheme will close at the end of October.

Businesses reopening

Throughout this month, more and more businesses have been given the go-ahead to reopen provided they follow social distancing guidelines. Pubs, bars, restaurants, hairdressers, hotels & B&Bs to name just a few were able to open earlier this month and soon to be given the go-ahead are gyms, swimming pools and exhibition halls.

This has all meant lots of people returning to work and has really helped to make things feel like they’re getting back to normal. It’s also allowed some holidaymakers to come to Cornwall for their summer holidays.

Temporary VAT reduction

Earlier this month, the Chancellor announced that there would be a temporary reduction in VAT to 5% for hospitality, accommodation and some attraction businesses.

Whilst not directly related to payroll and employees’ wages, this reduction does give businesses the opportunity to either pass on the savings to their customers or retain the extra money to invest in the business, which we anticipate will mean some employees can return to work rather than remain on furlough or be made redundant .

Arts support

One area that has been particularly hard hit during the pandemic has been the arts, especially as their route to reopening hasn’t been clear. So this month, a £1.57bn support package was announced for cultural and heritage institutions such as museums, galleries, music venues, independent cinemas and performing arts venues. Many employees in this sector have already been on furlough but it is hoped the grants and loans will help the organisations restart their plans and employees keep their jobs.


The first stage of the Self Employed Income Support Scheme is now closed for applications but the second phase will open in August. HMRC will contact those who are eligible but this link gives you more information.

As in previous months since the pandemic started, it has felt that things have changed fast this month and we have had to navigate uncharted waters. We have been working closely with our clients to support them and their employees during furlough and as they return to work. Thanks to being a Member of the CIPP, we have always had the latest information to hand which has been really important in keeping everyone up to date so if you have any questions at all about payroll, just get in touch.