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Job Retention Focus For Budget 2021
In his 3 March Budget, Chancellor Rishi Sunak set out a £65 billion plan to support jobs and businesses emerging from the Covid pandemic. We pick out...
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Chancellor Extends Furlough And Loan Schemes
The furlough scheme has been extended until the end of April 2021 and the government-guaranteed Covid-19 business loan schemes will now run until the end of March.
These changes come ahead of the Budget, which Chancellor Rishi Sunak has confirmed will take place on 3 March 2021. This will deliver the next phase of the plan to tackle the virus and protect jobs.
The extensions to the business loan and furlough schemes enable businesses to plan with certainty and access support in the first few months of the New Year ahead of the further update on wider Covid-19 economic support.
“Our package of support for businesses and workers continues to be one of the most generous and effective in the world – helping our economy to recover and protecting livelihoods across the country.”
– Rishi Sunak
MP, Chancellor of the Exchequer
Plan for Jobs
“We know the premium businesses place on certainty, so it is right that we enable businesses to plan ahead regardless of the path the virus takes," continued the Chancellor as he announced the measures on 17 December. "This is why we’re providing certainty and clarity by extending this support, as well as implementing our Plan for Jobs.”
The government will continue to pay 80% of the salary of employees for hours not worked until the end of April. Employers will only be required to pay wages, National Insurance Contributions (NICS) and pensions for hours worked; and NICS and pensions for hours not worked. The Chancellor said he would review the employer contribution element of the Coronavirus Job Retention Scheme (CJRS) in January.
The eligibility criteria for the UK-wide scheme will remain unchanged and these changes will continue to apply to all Devolved Administrations.
Bounce Back Loan Scheme
Businesses will also 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.
The schemes have already provided over £68 billion in guaranteed loans.
Successor loan scheme
The government has already announced that more support will be available beyond March, through a successor loan scheme. More details of the scheme will be announced in due course, with the government providing a further update on wider Covid-19 economic support at the Budget on 3 March.
Self Employment Income Support Scheme
The furlough and loan schemes are part of the government’s wider plan to support, create and protect jobs through its Plan for Jobs. This includes the Kickstart Scheme, more investment in training and skills as well as the Self Employment Income Support Scheme grant, with a fourth grant being made available from February to April 2021.
Time to make redundancies
Extending the CJRS until the end of April gives businesses certainty well ahead of the 45 day redundancy notice period, with the Budget timed to set out the next phase of support more than 45 days before the new end date of the scheme.
Picture: The furlough and business loan schemes have been extended to the end of April and March 2021 respectively.
Article written by Cathryn Ellis
18th December 2020