The furlough scheme will be extended for an extra month until the end of April, Chancellor Rishi Sunak has announced.
The scheme was due to expire at the end of March but the extension suggests the UK Government believes the economy will still be struggling to cope with the impact of the coronavirus pandemic.
Sunak also extended government loan schemes until the end of March to help support businesses.
He said: “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.
“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, which is why we’re providing certainty and clarity by extending this support, as well as implementing our Plan for Jobs.”
We are extending furlough until the end of April 2021.— Rishi Sunak (@RishiSunak) December 17, 2020
We will continue to pay 80% towards wages of unworked hours – giving businesses and employees across the UK certainty into the New Year.
Read more: https://t.co/tQzuqeAzzH #PlanForJobs pic.twitter.com/WRH5ih27d2
Under the furlough scheme 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 eligibility criteria for the UK-wide scheme remains unchanged and the changes will continue to apply to the devolved administrations in Edinburgh, Cardiff and Belfast.
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, which had all been due to close at the end of January, 2021.
Sunak also confirmed he will deliver the next UK budget on 3 March 2021.