COVID-19: Further business support announced

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Just days after the government extended the Coronavirus Job Retention Scheme (CJRS) and Self-Employment Income Support Scheme (SEISS) to cover workers during the November lockdown, the Chancellor has announced further changes to both initiatives.

The so-called Furlough scheme will now conclude at the end of March 2021.  During this time, affected employees will receive 80% of their current salary for hours not worked, up to a maximum of £2,500 per month.  Businesses will only need to pay National Insurance and employer pension contributions for the hours that the employee does not work.

As a result of this extension, the Job Retention Bonus, which was due to be paid to qualifying employers in February to encourage them to retain workers, has been postponed until ‘the appropriate time’.

The CJRS will be reviewed in January to see if economic conditions allow for employers to contribute a larger share of the costs.

Mirroring this, the Chancellor has also increased the size of the next grant under the SEISS, which covers the period November 2020 to January 2021, to 80% of average trading profits for the period, up to a maximum of £7,500.

With business and consumer confidence under pressure from the renewed government restrictions, there will no doubt be continued questions as to whether these changes are sufficient. However, anything that gives people more clarity about their future cashflow has to be considered good news.