Covid-19 furlough scheme extends to March 2021, along with extensions to the self-employed income support grant

As England entered a second lockdown on Thursday 5 2020, businesses and employees received an unexpected benefit from Chancellor Rishi Sunak. He announced a five-month extension of the furlough scheme to the end of March 2021.

Employees unable to work during this time because their role is not required will receive 80% of their current salary. This is a return to the original level from the summer; furlough payments had dropped to 70% of salary in September and to 60% in October.

The furlough scheme is open to any size of organisation, as long as they have a PAYE payroll scheme and a UK bank account.


Who’s eligible for the scheme?

For an employee to be eligible for the furlough extension, a payroll Real Time Information (RTI) submission to HMRC must have been made for them before midnight on 30 October 2020.

Neither the employer nor the employee needs to have used the furlough scheme previously.

There will be a review in January to see whether employer contributions will need to begin again. So, for now, employer only need to pay Employer’s NIC and pension contributions.


Some things to note

The Job Retention Bonus, which was set to pay businesses £1,000 for every employee retained until 31 January 2021, will now be paid from 15 February.

Employers can re-employ people that had been made redundant, if they were employed up until 23 September, and furlough them under the scheme.

Support for the self-employed will also increase for this period, back to summer levels of 80% of average profits, capped at £7,500 for a three-month period.


Further business support

Other grants and allowances have been reinstated to help businesses and individuals navigate the second lockdown:

  • The next self-employed income support grant will increase from 55% to 80% of average profits – up to a maximum of £7,500.
  • Cash grants of up to £3,000 per month are also available to businesses which are closed.
  • There are also plans to extend existing government-backed loan schemes and the Future Fund to the end of January, and an ability to top-up Bounce Back Loans
  • Homeowners can continue to take mortgage payment holidays. Borrowers who have not yet had a mortgage holiday under the existing scheme will be able to request a payment break from their lender of up to six months. This should not show up on their credit file. Those who have already taken advantage of a mortgage holiday will be able to request to extend it or take another one up to a six-month limit.
  • £1.1 billion is being given to Local Authorities to make one-off payments in support of businesses. More information on this is available from Peterborough City Council. Local organisation Opportunity Peterborough is also encouraging businesses to get in touch if they need support.
    If you need support for anything linked to Coronavirus – or you know somebody that does – visit Peterborough Coronavirus Hub. Its network of volunteers have already helped more than 1,000 city residents in need.

If you have any queries about the potential support for your business or your private financial situation, let us help. We’re experienced business accountants in Peterborough here to help you with all kinds of accountancy services, from payroll and bookkeeping to personal tax planning. Give us a call on 07842 507362 or email