Chancellor Rishi Sunak has announced that the furlough scheme will be extended until the end of March.
This confirms that the Job Retention Support Scheme will have been effective for an entire year.
The Furlough Scheme Extended Until March
The scheme offers furloughed employees 80% of their monthly salary (up to a maximum of £2,500). Employers only having to pay National Insurance and Pension contributions.
It was set to close on November the 1st, however due to the new four week national lockdown, the scheme was extended until the start of December.
However, Rishi Sunak has announced a further extension of the support scheme, with a review set to take place in January.
A Review In January
As we’ve seen in recent months, the Job Retention Support Scheme has been regularly revised as coronavirus restrictions were lifted in areas across the country.
At the lowest point, the scheme offered 60% of a furloughed employees wages, with the employer picking up the other 20% of wages themselves, including National Insurance and Pension contributions.
When the January review takes place, we wouldn’t be surprised to see the scheme revert back to these figures.
Of course, it depends on the economic landscape in the new year, but business owners should expect to see some changes to the furlough scheme in early 2021.
The Debt Keeps Growing
The UK economy has been severely hit by the coronavirus pandemic, and this decision marks an entire year of government funding, putting the country in billions of debt through this one scheme alone.
The treasury has always made clear that their highest priority was to save as many jobs as possible and protect the livelihoods of workers affected by the coronavirus pandemic.
The virus continues to spread quickly, and this is the reason for Rishi Sunak’s change to the support scheme.
Clearly even tougher times lie ahead for business owners, as the day will eventually come when this support starts getting reclaimed by the government in the form of taxes and cuts.
‘When Will The Government Increase Taxes Though?’ – We recently wrote this blog to try and answer this question for you. Just click the link and you’ll be taken straight to it!
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