The Chancellor’s decision to expand the furlough and self-employment schemes has been welcomed by Cirencester and Malmesbury-based accountancy firm McGills Chartered Accountants but it has said the withdrawal of the £1,000 per employee Job Retention Bonus must be reconsidered.
Chancellor, Rishi Sunak, announced in a statement to Parliament that the furlough scheme would be extended to the end of March. The scheme has now been extended twice in six days.
Just hours before the scheme was due to close on Saturday, it was extended to 2 December 2020.
The Chancellor also confirmed that employees made redundant before the scheme was due to end on 31 October 2020 can be brought back and furloughed.
The next round of the Self-Employment Income Support Scheme (SEISS) will now be worth 80 per cent of a self-employed individual’s average trading income over three months, capped at £7,500 in total, the Chancellor confirmed.
Only on Monday, this figure had been increased from 40 per cent to 55 per cent.
Sharla Dandy, Partner at McGills Chartered Accountants, said: “These extensions are welcome and we expect them to make a significant difference to businesses and self-employed alike this winter as we face heightened restrictions once again.
“We hope the extension of these schemes will enable otherwise viable businesses and the self-employed to be able to see through the current restrictions and be in a position to contribute to the economic recovery as we enter 2021.
“We also welcome the news that employees made redundant before these latest measures were announced can be brought back and furloughed.
“Again, we hope this will put employers in the best possible position to contribute to the economic recovery.”
Because of the extension of the furlough scheme, the Chancellor said the £1,000 per employee Job Retention Bonus will no longer be paid to businesses that retain previously furloughed staff until the end of January.
However, he said a new retention initiative would be announced at “the appropriate time”.
Sharla added: “The withdrawal of the Job Retention Bonus detracts from the welcome measures the Chancellor has announced and he should reconsider this decision.
“Businesses have taken decisions on the expectation of receiving support from the scheme, which may include spending commitments.
“There is no guarantee that any new retention scheme in the future will be worth as much or offered on the same terms.
“A more reasonable approach would be to allow businesses that do not use the extended furlough scheme to claim the Job Retention Bonus as planned.”