Chancellor Rishi Sunak has confirmed that the government’s furlough and Covid-19 business loan schemes will be extended into the Spring of 2021.
The extension to both schemes will ensure that businesses can have some certainty about their finances to avoid beginning the redundancy process before new support measures are announced in next year’s budget.
The Coronavirus Job Retention, or furlough, Scheme will now run until the end of April 2021, with the government continuing to contribute up to 80% towards wages for hours not worked. So far, over one million businesses across the UK have accessed the scheme, with up to 9.6 million workers having been on furlough for at least part of the year.
A review into the scheme had been expected in January, however has been brought forward by the Chancellor to help businesses with planning. Employer NI and pension contributions must still be paid by the employer for furloughed workers.
Government-guaranteed business loan schemes that were launched in response to the coronavirus pandemic were also confirmed to continue to run until the end of March 2021. The Bounce Back Loan Scheme, Coronavirus Business Interruption Loan Scheme, and the Coronavirus Large Business Interruption Loan Scheme were all due to come to an end in January.
Chancellor of the Exchequer Rishi Sunak said:
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.”
Business Secretary, Alok Sharma, said:
While our loan schemes have provided a vital lifeline to millions of firms across the country, we know that business owners need additional certainty as we head into the New Year.
“Extending government-backed loan schemes will give companies right across the UK the finance they need to support, protect and create jobs as we build back better from the pandemic.”