Chancellor Rishi Sunak has extended the furlough scheme by a month.
Chancellor Rishi Sunak has extended the furlough scheme for one month until the end of April next year.
Sunak said the move, which comes amid news that more areas of the country are to move into Tier 3, would provide “certainty for millions of jobs and businesses”. He also confirmed he would be extending the government-guaranteed Covid-19 business loan schemes, including the Bounce Back Loan Scheme, until the end of March.
The Chancellor said he would review the employer contribution element of the furlough scheme in January, but had decided to bring the extension announcement forward to allow businesses to plan ahead for the remainder of the winter and the New Year.
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. Kate Palmer from HR experts Peninsula welcomed the move.
She added: “Until we are told otherwise by the government, it looks like rules surrounding [the scheme’s] use remain the same; employers can use the scheme for the first time if eligible.
“While this is no doubt a bit of positive news in light of all the doom and gloom we seem to have seen of late; it also does suggest that the Government expects coronavirus disruption to continue for some time. To this end, employers must consider how the furlough scheme can help them, and seek guidance on how to correctly use it if necessary.”
IPSE (the Association of Independent Professionals and the Self-Employed) has said that as well as extending the furlough scheme, the government should also extend the Self-Employment Income Support Scheme (SEISS). It has warned that too often throughout the pandemic, the self-employed have been “an afterthought” for the government, receiving less comprehensive, later support.