The Government has said the coronavirus furlough and loan schemes will be extended until the end of April 2021.
These changes have been announced on the same day the Chancellor announced the Budget would take place on 3 March, 2021.
That is also the date the next phase of the coronavirus economic support plan will be unveiled.
So far, furlough has been used to help cover the cost of 9.6 million jobs across the UK, while more than one million businesses have accessed loans to help them through the crisis.
Under the furlough scheme the Government pays 80% of the salary of employees for hours not worked until the end of April.
Employers pay wages, National Insurance Contributions (NICS) and pensions for hours worked; and NICS and pensions for hours not worked.
Chancellor Rishi 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 that we enable them to plan ahead regardless of the path the virus takes, which is why we’re providing certainty and clarity by extending this support, as well as implementing our Plan for Jobs.”
The Chancellor originally planned to review furlough in January, but decided to bring this forward to let businesses to plan ahead.
Crucially, and unlike the 31 October deadline extension, extending the furlough until the end of April now means businesses will be able to see what the next stage of support looks like before having to make decisions about any redundancies needed.
The 31 October cliff edge, with furlough extended just a few days before, has been blamed for the surge in redundancies directly preceding it - with an all time record high of 370,000 jobs lost over the quarter according to the Office for National Statistics.
Businesses will also now have until the end of March to access the Bounce Back Loan Scheme, Coronavirus Business Interruption Loan Scheme, and the Coronavirus Large Business Interruption Loan Scheme.
These had been set to close at the end of January.
A successor loan scheme will be laid out in the Budget on 3 March, the Treasury said.
Business Secretary Alok Sharma, said: “While our loan schemes have provided a vital lifeline to millions of firms across the country, we know that business owners need additional certainty as we head into the New Year.
“Extending government-backed loan schemes will give companies right across the UK the finance they need to support, protect and create jobs as we build back better from the pandemic.”
