Monday, 10 May 2021

When does the furlough scheme end and is it available across the UK?

The Coronavirus Job Retention Scheme was introduced by Chancellor Rishi Sunak during the first lockdown to provide financial help for companies and workers.

Employers were given the option to furlough their staff instead of making them redundant or being laid off, with the government paying a certain amount of an employee’s pre-tax salary per month when a company doesn’t have enough work or money coming in to keep the workforce as it is.

Initially intended to run for the first lockdown, the scheme has been continually extended, a welcome bit of additional help for businesses in the wake of England’s third national lockdown, with one-off top-up grants of up to £9,000 for retail, hospitality and leisure forced to close in the wake of the pandemic.

When is the furlough scheme expected to end?

Here’s what you need to know…

When does the furlough scheme end?

The furlough scheme is set to run unti April 30, 2021.

Mr Sunak said of the extension: ‘Our package of support for businesses and workers continues to be one of the most generous and effective in the world – helping our economy to recover and protecting livelihoods across the country.

‘We know the premium businesses place on certainty, so it is right that we enable businesses to plan ahead regardless of the path the virus takes, which is why we’re providing certainty and clarity by extending this support, as well as implementing our Plan for Jobs.’

However, there is mounting speculation the scheme could actually be extended beyond April, with a source close to Sunak reportedly telling Bloomberg that ‘support for jobs isn’t going to end’ while most businesses cannot open.

How is furlough pay calculated?

The Coronavirus Job Retention Scheme allows workers to receive up to 80% of their pre-tax salary up to a maximum of £2,500 per month.

Your employer will be able to use your regular pay slips to calculate 80% of your salary if you are on a fixed contract, however, if your income varies from month to month – such as if you are on a zero hours contract – how will they work out what you’re owed?

To calculate your pay, your company will use whichever is the larger sum out of:

  • Your earnings in the same month last year
  • Your average monthly earnings for the 2019 / 2020 tax year.

If you’ve been in the role less than a year, your company can base the calculations on your average monthly pay since you’ve been employed.

Will the furlough scheme be available across the UK?

The Chancellor previously confirmed that the scheme will apply across the whole of the UK.

Mr Sunak said: ‘I also want to reassure the people of Scotland, Wales and Northern Ireland. The furlough scheme was designed and delivered by the Government of the United Kingdom on behalf of all the people of the United Kingdom, wherever they live.’

He added: ‘It is a demonstration of the strength of the Union and an undeniable truth of this crisis we have only been able to provide this level of economic support because we are a United Kingdom.

‘This Treasury is, has been and will always be the Treasury for the whole of the United Kingdom.’

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