Monday, March 8th, 2021
Tom Stubbs looks at the extensions to the Furlough Scheme and Self-Employment Income Support Scheme following the recent Budget.
On March 3, 2021, the Chancellor of the Exchequer, Rishi Sunak, delivered the budget statement for the 2021/2022 fiscal year to the House of Commons. Amongst a package of coronavirus-related support measures, the Chancellor announced extensions to the key schemes that had been put in place to protect and support jobs impacted by the pandemic.
Coronavirus Job Retention Scheme (Furlough Scheme)
Further to my previous article on the Furlough Scheme, the 2021 Budget delivers an extension to the scheme until September 2021.
The current rules provide employers with the ability to claim 80% of an employee’s salary for hours not worked, up to £2,500 a month. Employers will still have to pay employers’ National Insurance and pension contributions. If they wish to contribute more, employers may continue to choose to top up their employees’ wages above the 80% cap for hours not worked at their own expense.
From July 2021, the government will introduce an employer contribution towards the cost of unworked hours of 10% in July, 20% in August and 20% in September, as the economy begins to reopen.
The table below, courtesy of the GOV.UK website, which can be accessed here, shows the level of government contribution available in the coming months, the required employer contributions and the amount that the employee receives per month. Please note that the table is based on the employee being furloughed 100% of the time.
Self-Employment Income Support Scheme
The 2021 Budget has announced that there will be two further grants for individuals who are self-employed. The first grant (covering February to April 2021) will be worth 80% of three months’ average trading profits, paid out in a single instalment and capped at £7,500. The value of the final grant (covering May to September 2021) will depend on whether an individual’s turnover has fallen by more or less than 30%. As the 2019/20 tax returns will be used in determining grants, some of those who couldn’t receive previous SEISS grants will now be able to do so. It is believed that an additional 600,000 self-employed people will now be eligible for help. Further details on the final grant are to be provided by the government in due course.
If you require employment advice tailored to your circumstances, please do not hesitate to contact Hanne & Co’s expert Employment Law Team on 020 7228 0017 or James Collier at firstname.lastname@example.org.
Tom Stubbs is a Paralegal in Hanne & Co’s Employment Law Team.