Chancellor Rishi Sunak has announced further measures to the Government’s financial support schemes, continuing the Government’s commitment to “plan to help the UK economy to recover and protect livelihoods across the country.”
Extended support systems include extensions to the following schemes:
The Government has lengthened the furlough scheme to be in place until the end of April 2021, to support businesses during the first quarter of 2021.
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. That means that, unlike earlier this year when the Government started to scale back the subsidy and asked employers to put in more to cover wages, they will still have to pay only National Insurance and pension contributions.
Important points to note in making forthcoming claims in this extended period are as follows:
- The Coronavirus Job Retention Scheme has been extended until 30 April 2021.
- Claims for furlough days in December 2020 must be made by 14 January 2021.
- You can no longer submit claims for claim periods ending on or before 31 October 2020.
The furlough scheme remains an essential financial lifeline, with the Government reporting that the Coronavirus Job Retention Scheme (CJRS) has protected 9.6 million jobs across the UK.
Government Backed Loans
Businesses will also be given until the end of March 2021 to access the Bounce Back Loan Scheme, Coronavirus Business Interruption Loan Scheme, and the Coronavirus Large Business Interruption Loan Scheme. These schemes had been due to close at the end of January 2021, and it is hoped their extension will bring about financial relief to many companies.
The Chancellor added that “Extending Government-backed loan schemes will give companies right across the UK the finance they need to support, protect and create jobs as we build back better from the pandemic.”
So far, the schemes have paid £68 billion in guaranteed loans in a bid to keep businesses afloat and protect an economy severely negatively impacted by COVID-19.
The Chancellor also confirmed that the Budget will be on the 3 March 2021 and highlighted that it will set out the next phase of the plan to tackle the virus and protect jobs. We will keep you appraised regarding any proposed changes as soon as they are announced. As always, WHA will provide a full budget summary shortly after the budget presentation has concluded.
Against the backdrop of implementing new vaccines, these financial schemes should hopefully bridge the gap between struggling to contend with the virus as it mercilessly restricts economic activity, and being able to resume ‘business as normal’.