An extension of the furlough scheme into Spring 2021, has been announced by the Chancellor today, (November 5).
The Coronavirus Job Retention Scheme (CJRS) will now run until the end of March 2021 with employees receiving 80% of their current salary for hours not worked.
Support through the Self-Employment Income Support Scheme (SEISS) will be increased, with the third grant covering November to January calculated at 80% of average trading profits, up to a maximum of £7,500.
Chancellor of the Exchequer Rishi Sunak said: ”I’ve always said I would do whatever it takes to protect jobs and livelihoods across the UK – and that has meant adapting our support as the path of the virus has changed.
“It’s clear the economic effects are much longer lasting for businesses than the duration of any restrictions, which is why we have decided to go further with our support.
“Extending furlough and increasing our support for the self-employed will protect millions of jobs and give people and businesses the certainty they need over what will be a difficult winter.”
The furlough scheme was initially extended until December 2.
There are currently no employer contribution to wages for hours not worked. Employers will only be asked to cover National Insurance and employer pension contributions for hours not worked.
For an average claim, this accounts for 5% of total employment costs or £70 per employee per month. The CJRS extension will be reviewed in January to examine whether the economic circumstances are improving enough for employers to be asked to increase contributions.
Other financial support includes:
- cash grants of up to £3,000 per month for businesses which are closed worth more than £1 billion every month
- £1.1 billion is being given to Local Authorities, distributed on the basis of £20 per head, for one-off payments to enable them to support businesses more broadly
- plans to extend existing government-backed loan schemes and the Future Fund to the end of January, and an ability to top-up Bounce Back Loans
- an extension to the mortgage payment holiday for homeowners
- up to £500 million of funding for councils to support the local public health response