Sunak extends throughout the UK via March 2021
UPDATED: Rishi Sunak has extended the 80 percent vacation program to the end of March 2021, capping it at £ 2,500 per worker.
The extended vacation program will apply across the UK, not just England, as originally announced, and employers only need to cover social security and pension contributions.
To be eligible for the program, employees do not need to have previously been on vacation, but must be on or before October 30, 2020 on an employer’s RTI payroll.
An employer can reinstate an employee to send them on vacation if they are laid off after September 23.
Further guidelines are to be published on November 10th.
However, it is unlikely that many companies that have gone through the process and cost of layoffs will experience a change of heart and reinstate employees – leaving the Chancellor open to criticism that he should have been bolder and extended vacation earlier.
The Bank of England expects 5.5 million people to take part in the vacation program this month, which the Resolution Foundation said would cost £ 6.2 billion. The costs will be lower in the coming months when the economy reopens. At the height of the pandemic in April and May, 8.9 million people were on vacation.
The announcement came when the Bank of England announced another £ 150 billion quantitative easing – printing money – to prop up the economy.
The surprising move has been very much made by companies that can now plan this spring – instead of the stop-start support previously offered – and those who see the Chancellor send a message that companies won’t reopen until April 2021 positively received, a full year after the first announcement of the lockdown.
Musab Hemsi, Partner at LexLeyton, said, “This gives the executives the financial security and time they need to plan and weigh their options as they look past this lockdown to sort of reopen for the festive season . ”
However, Philip Richardson, partner and director of labor law at Stephensons Solicitors, said his law firm saw a quadrupling of inquiries from companies seeking advice before they began dismissal advice.
Richardson said, “For them, the stark reality of today’s trading conditions and national lockdowns has simply brought them to the breaking point. Only time will tell whether these recent measures will be enough to stem the flow of layoffs in the next few months. “
However, the Chancellor has been criticized for reintroducing the vacation program when Scotland, Wales, Northern Ireland and parts of northern England had stricter restrictions and did not receive such generous funding.
The Welsh government was unhappy when it asked for more funding last month during its “fire break” lockdown. It had to rely on its own coffers to fund a £ 300 million grant program.
Government extends vacation program by 80% through December