UK furlough scheme extended until March '21

The Job Retention Scheme (furlough) will be extended until the end of March 2021 across the whole of the UK, Chancellor Rishi Sunak has announced today (5th November).

Under the scheme, the government will fund 80% of employees' usual salary up to £2,500 per month if they are unable to work due to COVID-19 restrictions. Employers are required to make National Insurance Contributions (NIC) and pension contributions, and may choose to make up the remaining 20% of an employee's wage if they wish. 

The Government will review their level of contribution in January 2021, and will announce then whether employers will need to contribute a higher percentage. 

Employers will have flexibility to bring furloughed employees back to work on a part time basis or furlough them full-time. To qualify, employees must have been on the PAYE payroll by 30th September 2020; they do not need to have been on the furlough scheme prior to this date.

The extension of the Job Support Scheme means that the Job Retention Bonus of £1,000, which was due to paid at the end of January to businesses who retained staff under the Job Retention Scheme, will now no longer be paid, the Chancellor said. An alternative incentive is set to be announced.

Last week, the Chancellor announced that the furlough scheme was to be extended by a month until December 2020, after which it was due to be replaced by the Job Support Scheme.