Following its most recent announcement, the Government has further extended the Furlough Scheme to 31 March 2021, while also increasing support for the self-employed.
The scheme, officially known as the Coronavirus Job Retention Scheme, was originally due to end last Saturday on 31 October. This was then followed by a last minute announcement of a one month extension for November – reflecting the tighter Covid-19 measures and lockdowns.
Now, only days later, it has been extended again. It will also be more generous, paying up to 80% of workers’ usual salary for hours not worked (up to £2,500). The intention is to “give businesses security throughout the winter”, with employers only covering pension payments and National Insurance contributions (NICs) for the hours not worked.
Self-Employment Grant Boosted Again
As mentioned, there will be an increase in support for the self-employed through a taxable grant. The Self-Employed Income Support Scheme (SEISS) will cover 80% of profits of the period of November 2020 to January 2021, up from 55%.
This third self-employment grant is up to a limit of £7,500 paid in a single instalment, with applications open from 30 November to those that are eligible.
Looking beyond this, a fourth grant will cover the period from February 2021 until the end of April – although further information is yet to be provided.
What about the Job Retention Bonus?
This was set to be a grant for employers who retained staff after the furlough scheme ended. However, with furlough now continuing to the Spring, the Job Retention Bonus has been dropped and will not be paid in February.
It goes without saying that support packages can’t last forever. Come the new year, it will be crucial to look towards life beyond furlough, and a review of the policy will take place in January to see whether “economic circumstances are improving enough” to ask employers to increase what they contribute towards furloughed employees’ pay.
For now, an extension to furlough allows many businesses to breathe a sigh of relief by offering some much needed certainty of employment support for what will no doubt be a challenging winter.
For further information following the changes to Furlough, please get in touch with our team.
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