Furlough scheme extended again until end of April
The furlough scheme set up to support those whose jobs have been affected by the coronavirus pandemic has been extended another month and will now run until the end of April 2021, the Chancellor Rishi Sunak announced today. And businesses will now be able to apply for Government support schemes including bounce back loans until the end of March.
The Chancellor says he has made the changes to give businesses and employees across the UK "certainty into the New Year". Some 9.6 million people have been placed on furlough across the UK since the scheme's launch last March, and more than a million businesses have accessed loans to help them through the crisis.
The date of the next Budget was also announced today. It'll take place on 3 March 2021, and Sunak said it will deliver the next phase of the Government's plan to tackle the virus and provide wider Covid-19 economic support. Crucially, the Budget will take place more than 45 days before the new end date of the furlough scheme - this is important as 45 days is the redundancy notice period employers usually have to give.
How will the furlough extension work?
- The furlough scheme will now run until 30 April across the UK. It had been due to run until the end of March with a review scheduled for January.
- Employees on furlough will continue to get 80% of their salary for hours not worked, up to £2,500/month. The state will pay 80% of salaries for hours not worked until the end of April. Employers will only be required to pay wages, National Insurance Contributions (NICs) and pension contributions for hours worked, plus NICs and pensions for hours not worked.
- Employers across the UK can use the scheme – even if they haven't before. It's open to small, medium and large employers, and those which are charitable or not-for-profit – and crucially your employer doesn't previously need to have used the furlough scheme.
- You DON'T need to have been furloughed before to take part. However, you do need to have been on your employer's PAYE payroll on 30 October 2020 to be eligible. (To be precise, your employer must have made a Real Time Information payroll submission on your behalf on or before 30 October 2020). You can no longer submit furlough claims for claim periods ending on or before 31 October 2020. Claims for furlough days in December 2020 must be made by 14 January 2021.
- You CAN work part-time while on furlough. Your employer can either put you on furlough full-time, or you can work part-time and be furloughed for the hours you don't work. Your employer will have to cover your wages at the normal rate for any hours you do work.
- You can't work for your employer during the hours you're furloughed. This includes your normal work obligations and anything beyond your usual remit. However, you can work for another employer while furloughed (if your contract allows this) or volunteer elsewhere.
- Employees on all types of contract can take part. This includes those on zero-hours contracts and fixed-term contracts, as well as agency workers (including those employed by umbrella companies) and supply teachers.
- Shielders unable to work because they're deemed 'clinically extremely vulnerable' to coronavirus can be furloughed. It's the employer's decision whether to furlough you though. If you've asked and they won't, check if you're eligible for statutory sick pay.
The new Job Support Scheme – which had been due to start in December after furlough was initially expected to end – was "postponed" when it was announced in November that furlough would be extended for three months until the end of March 2021. We've asked the Treasury if it is still "postponed" and will update this story when we know more.
What about self-employed income support?
There was no announcement today of any change to the Self-Employment Income Support Scheme (SEISS), though we're double-checking with the Treasury whether any further announcement is expected.
The fourth grant of the Self-Employment Income Support Scheme is already expected to cover February to April 2021, though we still don't know what it'll be worth, when applications open or how eligibility criteria may differ. See our Coronavirus Self-Employed & Small Limited Company Help guide for full info on how SEISS works and other support availabile.
How has support for businesses been extended?
The Government has today revealed more help for businesses too:
- You'll now have longer to apply for bounce back loans and other business loans. Businesses will 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.
- It's unclear if the terms of the loans have changed. There was no announcement that they have, but we're checking with the Government and will update this story as soon as we get a response.
With a bounce back loan currently you can borrow between £2,000 and £50,000, though the amount is capped at 25% of your total turnover (usually for calendar year 2019, or new businesses can estimate). The Government guarantees 100% of the loan and there won’t be any fees or interest to pay for the first 12 months. See our Bounce back loans guide for more details.
- A new business loan scheme will launch after March 2021. The Government has already announced that more support for businesses will be available beyond March, through a successor loan scheme. Today it simply said more details will be announced "in due course".
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