Chancellor extends furlough to end of April 2021

Rushi Sunak

Businesses will now be able to utilise furlough until the end of April 2021 following Chancellor Rishi Sunak’s announcement earlier today (17th December).  Government-guaranteed Covid-19 business loan schemes which were due to close at the end of January have also been extended until the end of March. The move suggested Chancellor Rishi Sunak would provide “certainty and clarity”, for businesses and employees.
These changes come ahead of the Budget, which the Chancellor 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, so 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.
The Chancellor said he would review the employer contribution element of the CJRS in January, but decided to bring this forward to allow businesses to plan ahead for the remainder of the winter and the New Year.
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.
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 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.
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.
UKHospitality Chief Executive Kate Nicholls said, “The extension of the furlough scheme with full Government contribution through to April and the longer period for applying for business loans are, of course, very welcome.

“However, with yet more of the country having been served notice of moving into tighter restrictions and 72,500 of Britain’s 110,00 licensed premises unable to open and a further 12,500 wet-led venues with little chance of reopening, more will be needed to safeguard jobs and businesses in a sector being seemingly singled out to bear the brunt of Covid measures. Without additional business support to accompany this extension, there will inevitably be more widespread business failures and job losses.

“The extended period for business loans applications is much appreciated but the sums available are insubstantial and eligibility rules are too narrow. Too many hospitality businesses will still be fighting for survival. To instil the business confidence necessary to plan for survival, we urge the Government to commit to a business rates holiday to cover the period of 2021/22 and a VAT cut extension through to the end of 2021. Such measures will give a vital lifeline to many businesses and enable them to play their role in the economy’s recovery later in 2021.”
Emma McClarkin, Chief Executive of the British Beer and Pub Association said, “Extending the furlough scheme and committing to a Government contribution of 80% through to the end of April is a hugely positive move.
She continued, “I hope the Government will now turn its focus to a support package to protect hospitality businesses as well as committing to a roadmap out of this crisis in line with the vaccine rollout. Pubs and brewers need enhanced grant support, extended business rates holidays and VAT reductions and a cut to the rate of tax on beer. It is only with that kind of backing that Britain’s brewers and pubs will be in a position to reopen, continue to employ all those staff currently furloughed and help lead the much-needed economic recovery.”

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