Furlough and self-employment support scheme extended until end of Sept 2021

#Budget2021 – @RishiSunak is set to extend the Coronavirus Job Retention Scheme (CJRS) – which has protected 11.2 million jobs since the start of the pandemic, until the end of September.

MILLIONS of people across the UK will continue to be supported through the next stage of the pandemic with an extension of the government’s furlough scheme, the Chancellor is expected to announce at tomorrow’s Budget.

• Support for millions of workers to continue as UK-wide furlough scheme extended until end of September
• Employees will continue to receive 80% of current salary until the scheme ends, with employers asked for a small contribution from the end of July
• Chancellor also set to announce that more than 600,000 people, including the newly self-employed in 2019-20, will now be eligible for government support

This means businesses and individuals will be supported through the roadmap and beyond.

And in a major improvement in access to the self-employed scheme, he is also set to announce that more than 600,000 people, many of whom became self-employed in 2019-20, will now be able to claim direct cash grants under the Self-Employment Income Support Scheme (SEISS).  

Alongside the government’s Plan for Jobs, the injection of additional support will give businesses and hard-working families the certainty they need as we enter the next stage of our recovery.

Rishi Sunak, The Chancellor of the Exchequer, said:

“Our Covid support schemes have been a lifeline to millions, protecting jobs and incomes across the UK.

“There’s now light at the end of the tunnel with a roadmap for reopening, so it’s only right that we continue to help business and individuals through the challenging months ahead – and beyond.”

As part of the CJRS extension, there will be no change to the terms for employees and they will continue to receive 80% of their salary for hours not worked until the scheme ends.

As restrictions are eased and the economy begins to reopen, businesses will be asked to contribute alongside the taxpayer to the cost of paying their employees for hours not worked.

The government will ask for a small contribution of just 10% in July and 20% in August and September towards the hours their staff do not work.

The Chancellor will announce that a fourth SEISS grant will be available to claim from next month worth 80% of three months’ average trading profits up to £7,500 in total.

When the self-employment scheme was launched, it was based on tax returns for 2018-2019, the most recent year for which data was available; meaning it wasn’t possible for the newly self-employed to qualify.

Now this data is available, it means hundreds of thousands more people will be eligible.

The Chancellor will outline further details tomorrow – alongside details of a fifth grant.

The Budget will build on the Government’s Plan for Jobs and the unprecedented £280 billion package of support that has protected the lives and livelihoods of the British people.

This includes the furlough scheme, a strengthened welfare safety net, business grants, loans and mortgage holidays as well as measures to support people finding new jobs such as the Kickstart and Restart Scheme.

Sector Reaction

Rain Newton-Smith, Chief Economist, 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 fragile for some months yet.

As we make progress into the summer, it’s right that businesses start contributing a little more as revenues start to recover. Meanwhile it’s great to see more support for the newly self-employed, who have missed out over the last year.”

Mike Cherry, National Chairman, FSB said:                                                                   

“FSB represents small and micro businesses, and the self-employed.  This announcement will bring hope to both groups in our membership, making decisions that we have campaigned for, and will help millions of people and businesses.  We are pleased to see the CJRS furlough scheme extended at a generous level beyond planned date for restrictions to lift, and into what we hope to be a summer recovery.  This will help millions of people who work in a small business, and provide assurance for them to plan. 

Equally, it’s great to see our campaign on the newly self-employed – alongside groups like IPSE, the leading academics on self-employment Professor Mark Hart and Professor Julia Rouse, and trade unions like Prospect – has been heard by Ministers.  This is great news for the newly eligible self-employed, helping hundreds of thousands to access support for the first time, alongside the 2.7 million self-employed that have received help so far.  The confirmation of a SEISS Grant 5 also helps maintain support up to and beyond the planned lifting of restrictions.  Our near five million-strong sole trader community will be fundamental to our economic recovery.  Together, these elements build towards making this a pro-business Budget, one that sets small firms on course to help their local communities bounce back from a torrid year.”

Dr Adam Marshall, Director General, BCC said:

“The extension of the furlough scheme shows that the Chancellor has listened to our business communities. Many firms will be breathing a huge sigh of relief, particularly those businesses that are still closed or facing reduced demand due to Covid-19 restrictions. 

The furlough scheme has been a lifeline for companies all across the UK. This extension gives firms much more clarity on the way ahead, and will allow many to plan with greater optimism and confidence as they look to restart and rebuild over the coming months.”  

Kate Nicholls, CEO, UKHospitality said:

“Extending the full furlough support for businesses up to and beyond the full reopening date for hospitality is a very positive move. It will help keep businesses afloat and more jobs secure as they trade their way back to prosperity in the months and years to come. It will help businesses bring back staff flexibly which will be particularly helpful to those businesses, such as hotels, which will take longer to recover.”

Michelle Ovens CBE, Founder, Small Business Britain said:

“The extension of the furlough scheme is fantastic news for small businesses. It has been an absolute lifeline for many firms and their employees, helping to preserve jobs and livelihoods. The continuation of furlough will be a huge support in helping small businesses transition into a period of recovery and get back on their feet. This continued financial support needs to be accompanied by wider support including digital skills, management training and mentoring, such as that announced this week in the ‘Help to Grow’ package.

I am also pleased to see the Chancellor has extended the number of people eligible for the Self-Employment Income Support Scheme (SEISS), to take into account the newly self-employed. With the pandemic restrictions continuing for a much longer period that originally anticipated, it is right that eligibility  is extended. This intervention from the government will directly support sole traders and entrepreneurs who will no doubt play an important role in the UK’s economic recovery and future growth.”

Emma McClarkin, Chief Executive, British Beer & Pub Association said:

“The extension of furlough and flexible furlough will be much welcomed by the beer and pub sector as we rebuild our trade over time.”

CJRS:

• 11.2 million jobs cumulatively have been protected through the furlough scheme
• Between now and the 30th June the government will continue to pay 80% of wages up to a cap of £2,500 monthly for hours the employee does not work, employers will continue to pay employer National Insurance Contributions (NICs) and pension contributions.
• From 1st July, the Government will pay 70% of wages up to a cap of £2,187.50 for the hours the employee is on furlough. Employers will need to make an additional contribution of 10% towards the cost of paying for unworked hours and continue to pay employer NICs and pension contributions. Employees will continue to receive 80% of their wages up to a cap of £2,500 monthly, for time they are furloughed.
• From 1st August, the Government will pay 60% of wages up to a cap of £1,875 monthly for the hours the employee is on furlough. Employers will need to contribute 20% towards the cost of paying for unworked hours and continue to pay employer NICs and pension contributions.
• As under the current CJRS, flexible furloughing will be allowed in addition to full-time furloughing, so employers can bring employees back to work for any amount of time and any shift pattern, while still being able to claim CJRS for hours not worked.

SEISS:

• 2.7 million self-employed people have been supported by SEISS
• People who filed 2019-20 tax returns – which is the most up to date information HMRC holds for self-employed individuals – may now be eligible for the scheme.

The Chancellor had previously extended the Government’s Furlough Scheme until the end of March.