Furlough extended until March and self-employed support boosted again
The furlough scheme will be extended until the end of March, Chancellor Rishi Sunak has announced, while the next three-month self-employed income support grant will now be worth up to £7,500.
The Government made several far-reaching changes to its income support measures today, as a national lockdown in England got underway. In brief:
- Furlough will now run until March. It had been due to end in December, having already been extended earlier this week. Now, until March employees will continue to receive 80% of their usual salary for hours not worked, up to £2,500 a month. See full furlough extension details below.
- The third self-employed grant will now be worth 80% of average trading profits, up to £7,500. This covers the period from November 2020 to January 2021. Sadly, those excluded from the previous self-employment grants are STILL excluded though. See full self-employed boost info below.
- The Jobs Retention Bonus WON'T now be paid in February. This was set to be a grant for employers who retained staff after the furlough scheme ended, but with the furlough scheme now running beyond February, it no longer applies. The Government says it will "redeploy a retention incentive at the appropriate time", though we don't yet know if this will be the Jobs Retention Bonus or something different.
For full help on the income support available, see our Coronavirus Employees' Help and Self-Employed & Small Ltd Co Help guides. For all our guides covering the financial fallout of the pandemic, see our Coronavirus Help section.
The furlough scheme – officially known as the Coronavirus Job Retention Scheme – had been due to end last Saturday (31 October). But the Prime Minister announced at the last minute that it would be extended until December – and now, just days later, it's been extended again:
- The furlough scheme will now run until the 'end of March' across the UK. The Treasury hasn't given a precise date. As a result, the new Job Support Scheme – which had been due to start in December after furlough ended – has now been "postponed".
- Employees on furlough will continue to get 80% of their salary for hours not worked, up to £2,500/mth. For the time being, the state will pay that 80% and employers will only be asked to cover national insurance and employer pension contributions for hours not worked.
- The scheme will be reviewed in January. At that stage, the Government will review whether "economic circumstances are improving enough" to ask employers to increase what they contribute towards furloughed employees' pay for hours not worked.
- You can work part-time while on furlough or be furloughed full-time, as now. The Government says businesses will have flexibility to use the scheme for employees for any amount of time and shift pattern, including furloughing them full-time. Your employer will almost certainly have to cover your wages at the normal rate for any hours you do work, though we're double-checking this with the Treasury.
- Employees on all types of contract can take part. This means that those on zero-hours contracts and fixed-term contracts, as well as agency workers, will be included.
- You DON'T need to have been furloughed before to take part – and your employer doesn't need to have used the scheme before either. However, you do need to have been on your employer's PAYE payroll on Friday 30 October to be eligible. (Technically speaking, your employer must have made a PAYE Real Time Information submission to HM Revenue & Customs on your behalf between 20 March 2020 and 30 October 2020.)
- Been made redundant since late September? You CAN be rehired and furloughed. This applies if you were employed on 23 September 2020 and have since been made redundant or left your position voluntarily. (To be precise, your employer must have made a Real Time Information payroll submission on your behalf on or before 23 September 2020 AND you must have been made redundant or left voluntarily after 23 September 2020.) See full rehiring and furloughing help.
For more details on the ins and outs of the furlough scheme, see our Coronavirus Employees' Help guide.
The Government has already announced one extension to the Self-Employment Income Support Scheme (SEISS) this week. On Monday, it doubled the support available in November from 40% to 80% of trading profits, which increased the overall level of the third SEISS grant to 55% of trading profits, capped at £5,160.
Now it's announced that it's increased the grant, which is available across the UK, again:
- The third SEISS grant will now be worth 80% of trading profits for three months, capped at £7,500. This has gradually risen since the scheme was first announced – from 20%, to 40%, 55% and now 80%. At 80%, it's the equivalent of the support offered through the furlough scheme.
- Applications will still open on Monday 30 November. This hasn't changed since it was announced earlier this week. The third grant covers 1 November 2020 to 31 January 2021, but you apply for it in one go and it's paid in a single instalment.
- You can claim if you're actively trading OR were until recently and are temporarily unable to claim due to coronavirus. This latter option is new – and is likely to have been added so that self-employed people who've recently had to stop trading, for example due to the new national lockdown in England, are still eligible.
- Eligibility for the third grant hasn't otherwise changed – so the excluded are sadly still excluded. You'll need to declare you've been affected since Sunday 1 November by reduced demand due to coronavirus in order to claim. And crucially you must have been eligible for grants one and two, even if you didn't apply – so you must have filed a tax return for 2018/19, earn more than 50% of your total income from self-employment, and your average trading profit must be no more than £50,000/year. See full SEISS eligibility requirements.
- A fourth grant will still cover February to April. Nothing's changed on this today. We still don't know what it'll be worth, when applications will open or if eligibility criteria could be different – the Government's previously said it reserves the right to change eligibility for the fourth grant "to respond to changing circumstances".
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