Furlough was introduced back in March to prevent mass redundancies due to coronavirus.
In recent months, firms have had to top up furloughed wages by 20%, with the government paying 60%. Now, the state will put in the full 80%, with the employer only covering pension and national insurance contributions.
To be eligible for this extension, employees must have been on the payroll by 30 October 2020, but they don’t need to have been furloughed before. Employers can also continue to bring back employees part-time, and furlough them for the rest.
What else is available to employers?
- Up to £3,000 per month under the Local Restrictions Support Grant if their premises is forced to close
- £1,000 for every furloughed employee kept on until at least the end of January. This has now been put on hold, watch out for further announcements. The government still expected to offer a retention incentive in the near future.
- £1,500 for every out-of-work 16-24 year-old given a ”high quality” six-month work placement
- £2,000 for every under-25 apprentice taken on until the end of January, or £1,500 for over-25s
What is available for the self-employed?
- Support through the Self-Employment Income Support Scheme (SEISS) will be increased, with the third grant covering November to January calculated at 80% of average trading profits, up to a maximum of £7,500.
- HMRC will pay this more generous grant sooner than planned and in good time for Christmas –the window for claiming a grant will open on 30 November, two weeks earlier than previously announced.
- A further grant to follow covering February to April 2021.
- Mortgage payment holidays extended for up to 6 months
- Payment holidays will also continue to be available for consumer credit products such as personal loans and car finance.
Guarantee loan schemes
- application deadline for loan schemes extended – that is, the Bounce Back Loan Scheme, Coronavirus Business Interruption Loan Scheme, Future Fund, and Coronavirus Large Business Interruption Loan Scheme – to the end of January 2021. This will give businesses two extra months to make loan applications (relative to the current deadline of 30 November).
- Bounce Back Loan Scheme rules adjusted to allow those businesses who have borrowed less than their maximum (i.e. the lower of £50,000 or less than 25% of their turnover) to top-up their existing loan
Recap of existing economic support for businesses
- Reduced VAT for hospitality, accommodation and attractions until the end of March 2021
- Business rates relief for hospitality, retail, leisure and nurseries until the end of March 2021 in England
- Extensive tax deferrals for general tax, VAT and Income Tax Self-Assessment