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Further extension to the furlough scheme

17 December 2020: In a surprise move, the Chancellor has announced that the Coronavirus Job Retention Scheme is to be further extended until 30 April 2021.

In a written ministerial statement to parliament today, Rishi Sunak has confirmed that the Coronavirus Job Retention Scheme (CJRS) will be extended by another month,  until the end of April 2021.

The statement confirmed that the eligibility criteria for the scheme, the grant levels available and employer contributions all remain the same.

This means that for hours not worked employers can continue to claim for 80% of employee salaries for hours not worked, subject to the £2,500 cap, and will only need to pay employer national insurance and pension contributions. Employers will be required to pay wages, national insurance contributions and pension contributions for hours worked in the usual way.

The news of the extension to the scheme has come earlier than expected, as previously the Chancellor had committed to reviewing the level of support available in January 2021. In today’s statement, he confirmed that the review had come earlier to “provide certainty to businesses, so that they can plan for the remainder of the winter and New Year”.

His statement, entitled Economic Update, Sunak also confirmed that deadlines for applying for government-guaranteed COVID-19 loan schemes (CBILS, CLBILS and BBLS) had now been extended until 31 March 2021.

ICAEW's Chief Executive Michael Izza welcomed the announcement, saying: “The extension of the furlough scheme and the government-backed loans programme are a welcome and timely intervention and will help protect thousands of businesses and millions of jobs, especially in the sectors hit hardest by Tier 3 restrictions.

“The likelihood is that businesses will have to contend with tough conditions for months to come, so the Budget in March will therefore need to assure employers by providing targeted further support. However, it will also be an opportunity for government to consolidate its strategic thinking on the future of the UK’s economy, drawing together plans and investment in vital areas such as reskilling for the green economy, regional levelling-up, boosting entrepreneurism and improving productivity - all while seeking to place the public finances once again on a sustainable footing.

“Now as negotiations with the European Commission enter their final stage, we urge the government to spare no effort to secure a fair trade deal with the EU which will support our economic recovery post-COVID-19.”

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