Furlough to be extended until September as Chancellor sets out budget
Last updated 2nd Mar 2021
The furlough scheme will be extended until the end of September, with employers asked to contribute to workers' salaries from July, the Chancellor is set to announce.
Rishi Sunak will use Wednesday's Budget to pledge to continue to help businesses and individuals through the "challenging months ahead - and beyond''.
He is expected to say that the Coronavirus Job Retention Scheme, which has protected more than 11 million jobs since its inception, will remain in place until the end of September.
But the Government's contribution will be tapered from July - with employers asked to pay in alongside the taxpayer for the cost of furloughed employees.
In July, employers will be expected to contribute 10%, increasing to 20% in August and September, as the economy reopens.
Employees will continue to receive 80% of their salary for hours not worked until the scheme ends.
'Just hanging on'
Paul Stevenson, who owns Paesano restaurant, said: "If the furlough is extended until the summer then that's great news, but businesses still have the financial burden of holiday entitlements and pension payments for staff who are on furlough.
"If businesses aren't trading, how can they be expected to cover pension payments for the staff and holiday entitlement?
"Given the financial situation most businesses find themselves in now after 12 months of lockdowns, it would be unrealistic to expect any business to be contributing towards the furlough costs. Most of us are just hanging on, fixed costs have still needed to be met, so it would be unrealistic."
The Chancellor will also announce further support for self-employed workers, with more than 600,000 people - many of whom become self-employed in 2019/20 - now eligible for cash grants.
A fourth grant from the Self-Employment Income Support Scheme (SEISS) will be available to claim from April, worth 80% of three months' average trading profits up to £7,500.
The Treasury said that hundreds of thousands more people will be eligible for the grants this time, as tax return data for 2019/20 is now available.
Mr Sunak faced criticism that newly self-employed people were unable to benefit from the scheme previously.
The Chancellor is expected to outline further details of the proposals on Wednesday, alongside plans for a fifth grant.
Ahead of the Budget, he said: "Our Covid support schemes have been a lifeline to millions, protecting jobs and incomes across the UK.
"There's now light at the end of the tunnel with a roadmap for reopening, so it's only right that we continue to help business and individuals through the challenging months ahead - and beyond.''