Furlough Scheme Extended to March 2021

In light of further lockdown measures across the UK, the Government’s Furlough Scheme has been extended until 31st March 2021.

England will be back in lockdown from at least 5th November 2020 until 2nd December 2020 and a key requirement during this lockdown period is that most businesses and venues will need to close, including:

  • Non-essential retail shops like clothing shops, electronics shops, travel agents, betting shops and car showrooms.
  • Indoor and outdoor leisure and sporting venues like leisure centres, gyms, soft play areas and swimming pools.
  • Entertainment venues like theatres, concert halls, cinemas, museums, galleries and zoos.
  • Personal care facilities like hair and nail salons, tattoo parlours and massage parlours.
  • Places of worship, unless they are used for individual prayer, funerals or to provide formal childcare.

Under the extended Furlough Scheme the Government will pay:

  • For claim periods running to January 2021, employees will receive 80% of their wages for the hours they spend on furlough leave and therefore do not work, up to a maximum of £2,500 per month. Although, this percentage may be reviewed for February and March 2021.
  • The Employer will remain responsible for NIC’s and Pension Contributions on all payments to employees, meaning the Employer will have to pay NIC’s and pension contributions for any hours spent on furlough leave.
  • The Employer will be responsible for 100% of wages, NIC’s and pension contributions for hours actually worked by employees.

Whilst this is still better than the furlough scheme in October, it is not quite as generous as the initial scheme, during the first National lockdown.

Additionally, any employee who was made redundant on or after 23rd September 2020 can be re-hired and re-furloughed under the extended Furlough Scheme.

Employers can claim even if they, or the relevant employees, had not previously used the scheme and the furlough will continue to be flexible, i.e. employees can continue to do some work.

Employees can be Furloughed if they are shielding in line with public health guidance (or need to stay at home with someone who is shielding). That does not, of course, mean they have to be furloughed.

Similarly, support for workers through the Self-Employment Income Support Scheme (SEISS) will be increased. The next self-employed income support grant will increase from 55% to 80% of average profits, up to a maximum of £7,500 covering the period of  November 2020 to January 2021.

To support affected businesses, the Government has also announced business grants, these grants will depend on the rateable value of the property:

  • Grants of £1,334 per month where the rateable value is £15,000 or under.
  • Grants of £2,000 per month where the rateable value is between £15,000 to £51,000.
  • Grants of £3,000 per month where the rateable value is over £51,000.

Contact us, we are here to help

If you would like to discuss any of the above issues, please do not hesitate to get in touch with any members our Employment Team, via the below details: