As we were just about to begin winding down for the Christmas break, the Chancellor has stopped us in our tracks with several new announcements. Rishi Sunak has now set a date for Budget 2021, as well as extending both the furlough and loan schemes.
The Chancellor has set the Budget date for next year as 3 March 2021. Time will tell what measures he may introduce, however, our initial thoughts are that it may be too early to bring any big tax increases, as the coronavirus pandemic continues.
This hunch is further supported by the Government confirming that, as part of the Budget, they will set out their plans for the next phase of tackling the virus and protecting jobs.
As the Government had, in recent years, moved to holding the Budget in the autumn, rather than spring, it may be that we could end up with two Budgets next year.
Furlough scheme extension
Rishi Sunak has announced a further month’s extension to the furlough scheme, which will now end on 30 April 2021, rather than 31 March 2021.
The Chancellor also confirmed that the Government will continue to pay 80% of wages until the scheme ends in April. This should provide further certainty to employers, with the level of Government contribution originally due for review in January.
This extension ties in with the Budget date being set, when further support measures to protect jobs will be announced. It is understood that the Government has extended the scheme by a further month to give employers more than 45 days (the minimum consultation period for larger redundancy programmes) from the date of Budget to the end of the furlough scheme, to enable more informed decisions.
Loan schemes deadline extended
The Chancellor also announced an extension to the various loan schemes available to businesses which were originally due to close to new applicants on 31 January 2021.
Businesses will now have until the end of March 2021 to apply for a loan under the coronavirus business interruption loan scheme, coronavirus large business interruption scheme, bounce back loan scheme and future fund.
It was also confirmed that Government support will not stop there, and a successor loan scheme will be available beyond March 2021. Further details on this will be announced in due course.