Furlough scheme to be extended again until end of September

By Nikkie Thatcher

- Last updated on GMT

Employment initiative: this will be the fifth time the furlough scheme has been extended since it was introduced last spring (image: Getty/IakovKalinin)
Employment initiative: this will be the fifth time the furlough scheme has been extended since it was introduced last spring (image: Getty/IakovKalinin)

Related tags: Legislation, Government, Employment, Furlough

The Coronavirus Job Retention Scheme (CJRS) will be extended by four months, until the end of September, it will be announced in the Budget later today (Wednesday 3 March)

The scheme, which pays up to 80% of a workers' wage, up to £2,500, has been extended numerous times previously and was due to finish at the end of April.

The Morning Advertiser​ understands employers will have to contribute 10% in July and 20% in August and September, towards the hours their staff do not work.

The Chancellor originally announced the CJRS (known as furlough) in as the pandemic hit the UK in March 2020. This first phase was due expire in May 2020 but was extended until June and then was continued until October and the 'flexible furlough' was also introduced in July, allowing employees to work part-time and be furloughed part-time.

The scheme was then extended into a third phase from November 2020 until March 2021, and this was followed a further extension to 30 April 2021.

In addition, the Self Employed Income Support Scheme grant will also be available to claim from April, worth 80% of three months' average trading profits, up to £7,500.

The Chancellor is expected to announce further details as part of his Budget speech, alongside information about a fifth grant.

Responding to the latest extension of furlough, UKHospitality chief executive Kate Nicholls said: “Extending the full scheme up to and beyond the point of full reopening of the sector is a welcome move.

“It will help keep businesses afloat and more jobs secure as they trade their way back to prosperity in the years to come.

“This means it is more important than ever the Government sticks to its plan to allow full reopening of venues on 21 June.”

Unnecessary pressure

However, Nicholls went on to voice concern about how businesses are expected to contribute to the scheme from the end of July.

She added: “It will place unnecessary pressure on fragile businesses just as they are beginning to get back to their feet.

“It is also very disappointing not to have national insurance contributions removed from the scheme. Businesses are burning through their cash reserves and many will have exhausted them before they have a chance to reopen.

“Not all businesses are going to be out of the traps instantly. It will take time for them to reopen and they will be racking up costs in the mean time.”

Further support required

The trade body boss highlighted the importance of further support being announced in the Budget, which the Chancellor is set to reveal tomorrow (Wednesday 3 March) including an extension of the VAT cut and business rates holiday if businesses are expected to survive and thrive after the crisis has passed.

The Government also announced this week that pubs will be eligible for grants of up to £18,000​ (dependent on rateable value).

It means those with a rateable value of £15,000 or less will receive £8,000, those with a £15,000 to £51,000 rateable value are eligible for £12,000 in funding and those with a rateable value of more than £51,000 can get £18,000.

Related topics: Legislation

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