5th November, 2020
Furlough Scheme extended to March 2021
The Chancellor of the Exchequer, Rishi Sunak today announced that the Government will increase its support for businesses as England begins its four-week national lockdown.
In reaction to this announcement, Claire Brook, Employment Law Partner said:
“As England heads into its second national lockdown, today’s announcement from the Government will provide some much-needed clarity to businesses across the UK who are again having to close their doors or are facing reduced demand due to the coronavirus pandemic.
“The extension to the Coronavirus Job Retention scheme will come as a huge relief for many UK businesses. The scheme, which allows employers to furlough employees with government funding has now been extended for an additional five months until the end of March 2021.
“Under the scheme, employers will not have to contribute towards the wages for hours not worked but will have to cover National Insurance Contributions (NICs) and employer pensions contributions. It was also confirmed that flexible furlough will still be available, allowing employees to return to the workplace on a part-time basis, with employers still able to claim for 80 per cent of their unworked hours (capped at £2,500). The government contribution level will be reviewed in January 2021 and may be subject to change.
“To be eligible for the scheme, employees do not need to have been placed on furlough previously but must have been on an employer’s RTI payroll submission on or before 30 October 2020.
An employer may rehire an employee to place them on furlough if they were made redundant after 23 September 2020
Further guidance is due to be released on November 10.
“Additionally, it was announced that the Self-Employment Income Support Scheme (SEISS) will also be extended until Spring 2021, although we are awaiting an official date for this. We do however know that the third instalment of the scheme – which covers November to January – will increase to be 80 per cent of the average trading profits, up to a maximum of £7,500.
“Whilst it is encouraging to see the Government increasing its support in light of the second lockdown, the next four weeks will, without doubt, be an incredibly uncertain time for many, and it will be important that the Government continues to assess and amends these schemes as the situation continues to change.”
If you or your business would like advice on the Coronavirus Job Retention Scheme extension or any other Employment Law related matter please contact Claire Brook, Employment Law Partner.
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