Job retention scheme extended until 30 April 2021 on current terms

The Chancellor has confirmed that the coronavirus job retention scheme will be extended until 30 April 2021. In welcome news for employers, he has also confirmed that it will continue on its current terms. 

This means that the Government will continue to fund up to 80% of furloughed employees’ wages for hours not worked, with employers having to pay any employer national insurance contributions and pension contributions. Employers will also have to pay employees who are flexibly furloughed for any hours worked as usual. The Government contribution is capped at £2,500 per month, which reduces proportionately for employees who are flexibly furloughed. Employers are no longer able to claim a furlough grant for any days on or after 1 December 2020 during which a furloughed employee is serving out a period of notice (whether they have resigned or been dismissed). 

The eligibility criteria for the UK-wide scheme will remain unchanged.

The scheme had been due to be reviewed in January 2021, with a possible increase in employer contributions from 1 February and so the Chancellor’s announcement will give businesses a degree of certainty and help them plan for the first few months of 2021.  

The Chancellor also announced that the budget will take place on 3 March 2021 and will set out the next phase of support for businesses.