Furlough and loan schemes extended

Rishi (Santa) Sunak has delivered his Christmas gifts early this year by extending the furlough and loan schemes to help individuals and businesses.

He donned his virtual Father Christmas outfit to announce the furlough scheme was being extended until 30 April 2021, with the government continuing to contribute 80% towards wages.

Businesses will also now have until 31 March 2021 to access government loan schemes.

The announcements were made alongside confirmation that the next Budget will be on 3 March 2021.

Furlough scheme

The Chancellor had originally said he would review the employer contribution element of the furlough scheme at the end of January 2021, but decided instead 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 gives businesses certainty well ahead of the 45-day redundancy notice period, with the 3 March Budget setting out the next phase of support more than 45 days before the new end date of the scheme.

Since 1 December, the furlough scheme cannot be used to pay employees’ statutory or contractual notice periods.

See our detailed review of the furlough scheme.

Loan schemes

Businesses will also be given until the end of March to access the:

• Bounce Back Loan Scheme
• Coronavirus Business Interruption Loan Scheme, and
• 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 to all sectors of the economy.

The government has previously announced that more support will be available beyond March 2021, through a successor loan scheme.

More details of that scheme will be announced in due course, with the government providing a further update on wider Covid-19 economic support at the 3 March Budget.

See our separate article: Can I still apply for a Coronavirus loan?

Capitalise

Bishop Fleming has a team of fundraising specialists ready to advise clients through Coronavirus. As a partner of Capitalise, we have access to 100+ lenders to provide businesses with the opportunity to secure the right kind of funding. Our Capitalise team will support you through all stages of the funding process.

Find out more about raising finance through Capitalise here.

Check out our Business after COVID-19: Transition Knowledge Hub for more guidance and advice on managing the pandemic.