Chancellor extends furlough and loan schemes

The Chancellor of the Exchequer, Rishi Sunak, has today (17 December 2020) announced that the Coronavirus Job Retention Scheme (CJRS) has been extended until 30 April 2021 (previously 31 March 2020), with the Government continuing to contribute 80% towards employees’ wages.

Sunak also confirmed that he would be extending the Government-guaranteed Covid-19 business loan schemes until 31 March 2020. These changes come ahead of the next Budget, which the Sunak confirmed will take place on 3 March 2021.

The Chancellor said he would review the employer contribution element of the CJRS in January 2021; however, he decided to introduce these measures to enable businesses to plan for the remainder of the winter and the New Year.

What do the changes mean for businesses?

The Government will continue to pay 80% of the salary of employees for hours not worked until 30 April 2020. 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 eligibility criteria for the UK-wide scheme will remain unchanged and these changes will continue to apply to all Devolved Administrations.

Businesses will also be given until 31 March 2021 to access the Bounce Back Loan Scheme (BBLS), Coronavirus Business Interruption Loan Scheme (CBILS), and the Coronavirus Large Business Interruption Loan Scheme (CLBILS). These had been due to close on 31 January 2021.

The Government has already announced that more support will be available beyond March 2021 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 2021.

For more information on the financial Government-backed support available for your business during the coronavirus, click here.

Source: Gov.UK