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Furlough Scheme Extended until March 2021 (for the whole of the UK)

November 05, 2020

The announcement today by Chancellor Rishi Sunak that the Coronavirus Job Retention Scheme (CJRS) – known as the furlough scheme – will be extended until the end of March 2021 will be welcomed by business owners.

It was previously announced – just days ago – that the furlough scheme would be extended until 2 December 2020. It was plain as a pike staff that a one-month extension was not going to be enough, and it became inevitable during this week that it would be extended for a longer period.

For some businesses, the extended furlough scheme will be a lifeline. For others it may help provide some breathing space over the winter months. The extension of the furlough scheme is particularly important as there are only 57 days until the end of the Brexit transition period, and indications show that many UK and International businesses have not planned for the impact of Brexit.

We have previously called on the UK Government to give clarity to business owners, and investors, so that they can plan for the next 3-6 months. Today’s announcement will provide some of that much needed clarity. However, we anticipate that employers will continue to carry out planned redundancy consultations and business reorganisations in the lead up to Christmas, and into the New Year, whilst utilizing the extended furlough scheme.

We await further details of the extended scheme. The press release to today’s announcement explains that: “Employers will only be asked to cover National Insurance and employer pension contributions for hours not worked. For an average claim, this accounts for just 5% of total employment costs or £70 per employee per month. The CJRS extension will be reviewed in January to examine whether the economic circumstances are improving enough for employers to be asked to increase contributions”.

For further information and advice, on the extended furlough scheme and managing your workforce please contact our employment team.

The material contained in this article is provided for general purposes only and does not constitute legal or other professional advice specific to your situation, and should not be relied upon. Appropriate legal advice should be sought for your specific circumstances and before any action is taken.

© Miller Rosenfalck LLP, 5 November 2020

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