Some 80% of employees’ salary not worked will be covered by the scheme (up to £2,500 a month) until the end of April and employers will only have to pay wages, national insurance contributions and pensions for hours worked alongside national insurance contributions and pensions for hours not worked.

The eligibility criteria for the UK-wide scheme will remain unchanged and these changes will continue to apply to all devolved administrations.

Loan scheme deadline

Chancellor Rishi Sunak had said he would review the employer contribution element of the furlough scheme in January but decided to bring this forward in a bid to help businesses to plan head for the remainder of this year and next.

The Government is also extending the Bounce Back Loan Scheme, Coronavirus Business Interruption Loan Scheme and the Coronavirus Large Business Interruption Loan Scheme by two months until the end of March 2021.

Sunak confirmed the Budget will take place on 3 March and set out the Government’s next phase of the plan to tackle the virus and help to save jobs.

Additional certainty

Sunak said: “Our package of support for businesses and workers continues to be one of the most generous and effective in the world – helping our economy to recover and protecting livelihoods across the country.

“We know the premium businesses place on certainty so it is right we enable businesses to plan ahead, regardless of the path the virus takes, which is why we are providing certainty and clarity by extending this support, as well as implementing our plan for jobs.”