Chancellor extends furlough and loan schemes

by Iain McIlwee | 17 Dec, 2020 | Insurance, Main News Feed

In a move to ensure firms can access the support they need through continuing economic disruption, Rishi Sunak also confirmed he would be extending the government-guaranteed Covid-19 business loan schemes until the end of March.

These changes come ahead of the Budget, which the Chancellor has confirmed will take place on 3 March 2021. This will deliver the next phase of the plan to tackle the virus and protect jobs, so the extensions to the business loan and furlough schemes enable businesses to plan with certainty and access support in the first few months of the New Year ahead of the further update on wider Covid-19 economic support.

So far, the Coronavirus Job Retention Scheme (CJRS) scheme has protected 9.6 million jobs across the UK with more than one million businesses accessing loans to help them through the crisis.

Chancellor of the Exchequer Rishi Sunak said:

“Our package of support for businesses and workers continues to be one of the most generous and effective in the world – helping our economy to recover and protecting livelihoods across the country.

“We know the premium businesses place on certainty, so it is right that we enable businesses to plan ahead regardless of the path the virus takes, which is why we’re providing certainty and clarity by extending this support, as well as implementing our Plan for Jobs.”

Business Secretary, Alok Sharma, said:

“While our loan schemes have provided a vital lifeline to millions of firms across the country, we know that business owners need additional certainty as we head into the New Year.

“Extending government-backed loan schemes will give companies right across the UK the finance they need to support, protect and create jobs as we build back better from the pandemic.”

The Chancellor said he would review the employer contribution element of the CJRS in January, but decided to bring this forward to allow businesses to plan ahead for the remainder of the winter and the New Year.

The government will continue to pay 80% of the salary of employees for hours not worked until the end of April. Employers will only be required to pay wages, National Insurance Contributions (NICS) and pensions for hours worked; and NICS and pensions for hours not worked.

The eligibility criteria for the UK-wide scheme will remain unchanged and these changes will continue to apply to all Devolved Administrations.

Extending the scheme until the end of April means businesses across the country will have certainty about what support will be available to them.

Businesses will also be given until the end of March to access the Bounce Back Loan Scheme, Coronavirus Business Interruption Loan Scheme, and the Coronavirus Large Business Interruption Loan Scheme. These had been due to close at the end of January.

The schemes have already provided over £68 billion in guaranteed loans, and helped to keep afloat business in all sectors of the UK economy who have been impacted by coronavirus.

We are extending the schemes now, ahead of Christmas and further into the new year, to ensure that businesses can continue to access the support they need to grow and recover.

The government has already announced that more support will be available beyond March, through a successor loan scheme. More details of the scheme will be announced in due course, with the government providing a further update on wider Covid-19 economic support at the Budget on 3 March.

The furlough and loan schemes are part of the government’s wider plan to support, create and protect jobs through its Plan for Jobs. This includes the Kickstart Scheme, more investment in training and skills as well as the Self Employment Income Support Scheme grant, with a fourth grant being made available from February to April 2021.

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