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17th December Update: Furlough Scheme Extended to April 2021

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Chancellor Rishi Sunak has announced that the furlough scheme will be extended by one month until the 30th April 2021 in an announcement made on the 17th December.

The furlough scheme, in which the government contributes towards 80% of eligible workers’ wages, was due to end at the close of March 2021, but has been extended to offer businesses and employees more certainty over Christmas and the New Year, and into Q1 2021.

Government support has been through many iterations over the past year. Since the Coronavirus Job Retention Scheme (CJRS) was first launched in March 2020, it’s reported that the scheme has protected over 9.6 million jobs across the UK, with more than one million businesses accessing COVID-19 support loans in order to stay afloat, according to Treasury figures. Further initiatives, such as the Job Support Scheme (JSS) which was due to start on the 1st November 2020, was postponed as the CJRS was first extended until December, then March, and now April.

In his announcement, Mr Sunak said: “Our package of support for businesses and workers continues to be one of the most generous and effective in the world – helping our economy to recover and protecting livelihoods across the country.

“We know the premium businesses place on certainty, so it is right that we enable businesses to plan ahead regardless of the path the virus takes, which is why we’re providing certainty and clarity by extending this support, as well as implementing our Plan for Jobs.”

What Does This Mean for Businesses?

The extension of the CJRS suggests that the Treasury believes the economy will still be feeling the impact of Coronavirus beyond what was originally expected.

Whilst a review of the employer contributions towards furloughed employees wages will be carried out in January, the government have guaranteed that they will continue to pay 80% of the salary of employers for hours not worked until the end of April. As an employer, you are only required to pay wages, National Insurance Contributions and pensions for hours worked, and NICS and pensions for hours not worked.

There is no change to the eligibility criteria, and those who have been submitting for furlough support for their employees and businesses should continue to accurately track and record their employees flexible working hours to allow accurate calculations.

In addition to the CJRS being extended, the deadline for businesses accessing the Bounce Back Loan Scheme, Coronavirus Business Interruption Loan Scheme, and the Coronavirus Large Business Interruption Loan Scheme have all been extended to March where they were previously due to close at the end of January. For those who are self-employed, a fourth Self Employed Income Support Scheme grant will be made available from February-April 2021.

What’s Next?

The government will be conducting a further budget review on the 3rd March 2021, but have already confirmed that more support will be available beyond March. More details of further loan schemes and furlough updates are said to be made in due course. 

Need help recording your employees flexible working hours? Our flexible furlough management software can be up and running in as little as two weeks. Contact the team today for further information on how we can help.

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