Furlough scheme extended to March 2021
Date published: 05 November 2020
Photo: HM Treasury
The Chancellor Rishi Sunak
The furlough scheme has been extended by five months to March 2021, the Chancellor Rishi Sunak has announced today (Thursday 5 November).
Furlough, also known as 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.
Similarly, support for millions more workers 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.
The Chancellor of the Exchequer Rishi Sunak said: “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 2 December. Evidence from the first lockdown showed that the economic effects are much longer lasting for businesses than the duration of restrictions.
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 just 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.
The furlough scheme has protected over nine million jobs across the UK, and self-employed people have already received over £13 billion in support.
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