Furlough scheme extended to the end of April 2021

The Chancellor's Christmas present to employers this year is a little additional certainty in otherwise  uncertain times.

On 17 December 2020 Rishi Sunak announced that the CJRS furlough scheme has been:

  • Extended through until the end of April 2021; and
  • Government contributions will now certainly continue at the current rate of 80% for hours not worked (up to the cap of £2,500 per month, pro-rated where some work is done). Employers will therefore continue to be responsible only for NICs and pensions for hours not worked by furloughed employees.

The Government had previously indicated the furlough scheme would be extended until the end of March and that it would review Government and employer contributions in January. This had left many businesses unsure if they could afford to continue to employ those for whom they had no (or reduced) work owing to coronavirus restrictions beyond the end of January 2021 – in circumstances where 20/100 or more dismissals in one establishment would require a minimum respectively of a 30/45-day minimum collective redundancy consultation period (which would have run from Christmas Eve).

This confirmation means businesses will be able to plan workforces for the first few months of the year from a position of certainty as to the cost of continuing to furlough staff and with a longer gap before needing to make any crunch decisions on redundancies.

The Government has also extended access to the Bounce Back Loan Scheme, Coronavirus Business Interruption Loan Scheme, and the Coronavirus Large Business Interruption Loan Scheme until the end of March 2021 (when these had been due to close at the end of January).

The announcement for the plans thereafter are anticipated to be made around 3 March when the next Budget will be announced.