Chancellor Rishi Sunak has announced in yesterday's Budget (3 March 2021) that the Coronavirus Job Retention Scheme (“furlough scheme”) will be extended until the end of September. The furlough scheme, under which the government pays 80% of employees' wages for the hours they cannot work during the pandemic – up to a limit of £2,500 a month – had been due to close at the end of April 2021. As the furlough scheme continues, employers will be expected to contribute 10% of a furloughed worker's wages in July, rising to 20% in August and September, as the economy reopens.
The chancellor has also announced that the self-employment income support scheme (SEISS) is being extended until September 2021. A fourth cash grant under the scheme will run from February to April 2021, covering 80% of three months' average trading profits (capped at £7,500). Access to the scheme has been widened, taking into account tax returns for 2019-20 (provided they were submitted by 2 March 2021) and will be open to those who became self-employed in the tax year 2019-20, which will result in some 600,000 more self-employed people becoming eligible for the scheme. There will also be a fifth grant covering May to September 2021, which will be based on the reduction of turnover in the year April 2020 to April 2021. For those whose turnover has fallen by 30% or more, the grant will remain worth 80% of three months' average trading profits (capped at £7,500), whereas those whose turnover has fallen by less than 30% will be eligible for a 30% grant (capped at £2,850).
Originally published 4 March 2021
Visit us at mayerbrown.com
Mayer Brown is a global legal services provider comprising legal practices that are separate entities (the "Mayer Brown Practices"). The Mayer Brown Practices are: Mayer Brown LLP and Mayer Brown Europe – Brussels LLP, both limited liability partnerships established in Illinois USA; Mayer Brown International LLP, a limited liability partnership incorporated in England and Wales (authorized and regulated by the Solicitors Regulation Authority and registered in England and Wales number OC 303359); Mayer Brown, a SELAS established in France; Mayer Brown JSM, a Hong Kong partnership and its associated entities in Asia; and Tauil & Chequer Advogados, a Brazilian law partnership with which Mayer Brown is associated. "Mayer Brown" and the Mayer Brown logo are the trademarks of the Mayer Brown Practices in their respective jurisdictions.
© Copyright 2020. The Mayer Brown Practices. All rights reserved.
This Mayer Brown article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.