03 Mar 2021

Budget 2021: Furlough scheme extended until September

Budget 2021: Furlough scheme extended until September

The UK job furlough scheme is to be extended until the end of September.

Chancellor Rishi Sunak gave the welcome news in his Budget today.

The project has protected more than 11million jobs - over 300,000 of them north of the border - since Coronavirus struck.

But it had been due to finish at the end of next month, and there were growing calls for an extension.

Mr Sunak said the UK Government was proud of the furlough scheme.

"It is one of the most generous schemes in the world, protecting millions of people's jobs and their incomes," he added.

The initiative currently pays 80% of employees' wages for the hours they cannot work during the pandemic.

Company contributions

However, the UK Government's contribution is to be tapered from July - with employers having to pay in alongside the taxpayer for the cost of furloughed workers.

Employers will have to contribute 10% towards the hours their staff do not work in July, increasing to 20% in August and September, as the economy reopens.

It was last March when the UK Government announced the project. It was designed to protect the economy by assisting employers whose operations were badly affected by Covid-19 to retain their staff.

The extension has been welcomed by industry.

Rain Newton-Smith, chief economist at the CBI, said: "Quite simply, extending the scheme will keep millions more in work and give businesses the chance to catch their breath as we carefully exit lockdown.

"The furlough scheme has been a stand-out success throughout the crisis. It's common sense to keep the scheme going while business resilience remains so fragile for some months yet.

"As we make progress into the summer, it's right that businesses start contributing to be part of the scheme."  

Help for self-employed

There was also good news from the Chancellor on the self-employed income support scheme.

The extension of the project to September will see 600,000 more people who filed a tax return in 2019-20 now able to claim for the first time.

The Budget also confirmed the continuation of the temporary £20 per week increase to the Universal Credit standard allowance for a further six months.

Alongside this, the Government will make a one-off payment of £500 to eligible Working Tax Credit recipients across the UK.

The Budget also increases support for traineeships for young people and payments for employers who hire new apprenticeships to further help those looking for work.

Employment law support for businesses

For further information, or to speak to a member of our Employment Law team, click here to get in touch.

We also have further articles on furlough here:

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