Chancellor extends furlough and loan schemes

  • Businesses struggling will have now until the end of March to access government generous loan schemes
  • Chancellor confirmed that the Budget will be on the 3 March and set out the next phase of the plan to tackle the virus and protect jobs

The furlough scheme has been extended until the end of April 2021 with the government continuing to contribute 80% towards wages – giving businesses and employees across the UK certainty into the New Year, the Chancellor announced today.

In a move to ensure firms can access the support they need through continuing economic disruption, Rishi Sunak also confirmed he would be extending the government-guaranteed Covid-19 business loan schemes until the end of March.

These changes come ahead of the Budget, which the Chancellor has confirmed will take place on 3 March 2021. This will deliver the next phase of the plan to tackle the virus and protect jobs, so the extensions to the business loan and furlough schemes enable businesses to plan with certainty and access support in the first few months of the New Year ahead of the further update on wider Covid-19 economic support.

The government will continue to pay 80% of the salary of employees for hours not worked until the end of April. Employers will only be required to pay wages, National Insurance Contributions (NICS) and pensions for hours worked; and NICS and pensions for hours not worked.

The eligibility criteria for the UK-wide scheme will remain unchanged. Extending the scheme until the end of April means businesses across the country will have certainty about what support will be available to them.

Businesses will also be given until the end of March to access the Bounce Back Loan Scheme, Coronavirus Business Interruption Loan Scheme, and the Coronavirus Large Business Interruption Loan Scheme. These had been due to close at the end of January.

The government has already announced that more support will be available beyond March, through a successor loan scheme. More details of the scheme will be announced in due course, with the government providing a further update on wider Covid-19 economic support at the Budget on 3 March.

Source: Gov.uk

17 December 2020

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