Furlough and COVID-19 business support set to be extended until May

The Chancellor Rishi Sunak is reportedly planning to extend furlough and other business support until May, ensuring most businesses can survive through the planned roadmap out of lockdown.

The scheme is due to run out at the end of the financial year but Sunak is expected to extend this until at least May when he delivers his budget next week. After that, government sources suggest furlough support will be gradually wound down gradually in June.

According to The Times, Sunak is also looking at reinstating a government scheme to pay one-off bonuses to companies that take back furloughed workers, with sector-specific support likely for industries such as aviation, which may take longer to reopen.

The business rates holiday for retail, hospitality and leisure businesses will also be extended, along with the VAT cut for hospitality and tourism. Sunak will reportedly also announce plans to raise corporation tax over the course of this parliament, likely to 23%-25%.

Yesterday Matthew Percival, Director of People and Skills at the CBI praised Prime Minister Boris Johnson's roadmap for removing England's restrictions but warned next week’s Budget must include further help for businesses.

He said: “With tough decisions on jobs being taken daily, employers need the Budget to provide further business support until the economy is fully reopen.”