Chancellor Rishi Sunak will extend the furlough scheme until the end of September when he makes his Budget speech later today.
The chancellor will use the Budget to extend the Coronavirus Job Retention Scheme (CJRS), which pays 80 per cent of employees' wages for the hours they cannot work in the pandemic, until September 30, the Treasury has said.
However employers will be expected to pay 10 per cent towards the hours their staff do not work in July, increasing to 20 per cent in August and September, as the economy starts to reopen.
Speaking ahead of the Budget, Sunak said: “Our Covid support schemes have been a lifeline to millions, protecting jobs and incomes across the UK.
“There’s now light at the end of the tunnel with a roadmap for reopening, so it’s only right that we continue to help business and individuals through the challenging months ahead - and beyond.”
Further support for self-employed workers will also be announced.
A fourth SEISS grant will be available to claim from next month, worth 80 per cent of three months’ average trading profits up to £7,500 in total.
The Treasury said hundreds of thousands more people would be eligible for the grants this time, as tax return data for 2019-20 is now available.
When the self-employment scheme was launched, Sunak faced criticism that it was based on tax returns for 2018-19, meaning it wasn’t possible for the newly self-employed to qualify.
The chancellor will outline further details later today – alongside details of a fifth grant.
The Treasury said the Budget would build on the government's plan for jobs and the £280bn package of support during the coronavirus crisis.
Rain Newton-Smith, chief economist at the Confederation of British Industry, said it was common sense to keep the furlough scheme running while business resilience remains fragile.
Newton-Smith said: “As we make progress into the summer, it’s right that businesses start contributing a little more as revenues start to recover.
“Meanwhile it’s great to see more support for the newly self-employed, who have missed out over the last year.”
Mike Cherry, national chairman of the Federation of Small Businesses, said the confirmation of a fifth grant for the self-employed helped maintain support beyond the planned lifting of restrictions.
He said: “Our near five million-strong sole trader community will be fundamental to our economic recovery.
“Together, these elements build towards making this a pro-business Budget, one that sets small firms on course to help their local communities bounce back from a torrid year.”
amy.austin@ft.com
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