The furlough job scheme will continue until September, the chancellor will confirm in his budget statement on Wednesday.
Rishi Sunak will end the uncertainty over furlough by announcing support for millions of employees across the UK who cannot work because of lockdown will continue for another six months.
The job protection scheme has shielded 11.2 million jobs since the start of the pandemic. In Scotland 779,500 jobs have been retained through the furlough scheme.
The chancellor is also due to announce that people who became self-employed in the year before the pandemic began can now apply for support grants meaning that some 600,000 people will be eligible.
Under furlough employees will continue to receive 80 per cent of their current salary until the scheme ends, with employers asked for a small contribution from the end of July.
The government will ask firms for a small contribution of 10 per cent in July and 20per cent in August and September towards the hours their staff do not work.
Under the Self-Employment Income Support Scheme more than 600,000 people, including the newly self-employed in 2019-20, will now be eligible for government support.
Those eligible will be available to claim 80 per cent of three months’ average trading profits up to £7,500 in total.
Speaking ahead of the budget Sunak said the Covid support schemes have been a lifeline to millions and would continue as restrictions are phased out.
He said: “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.”
He added: "Our Covid support schemes have been a lifeline to millions, protecting jobs and incomes across the UK.”
Labour’s Bridget Phillipson MP said the changes to support schemes could have been made months ago.
She added: “ Businesses and workers have been pleading with the Chancellor to give them certainty but they have had to wait because he said it wouldn’t be appropriate until the Budget. Announcing it the night before shows the focus is on Rishi Sunak getting his moment in the sun rather than protecting jobs and livelihoods.”
“We need a Budget that secures Britain’s recovery and rebuilds the economic foundations the Conservatives weakened before the crisis. That means a plan to support jobs and businesses, protect family finances and set Britain on the path to a better, more secure future.”
SNP Shadow Business Secretary Stephen Flynn MP said: “The SNP has been calling for a full extension to the furlough scheme for months, and while this eleventh hour concession is welcome it still falls short of a commitment to retain full support at 80 per cent of pay for as long as it is required by the devolved nations."
