Government business support update

Specialist medical accountant Vanessa Sanders brings you up to date with yet more alterations to the Government’s support for businesses.

The Chancellor of the Exchequer Rishi Sunak announced last week that there was to be a one-month extension of the Coronavirus Job Retention Scheme (CJRS) for November, coinciding with the tighter Covid-19 measures introduced in terms of a second lockdown in England. 

Worryingly, Sunak has now stated that the CJRS will be further extended until the end of March. 

Addressing the House of Commons, he set out the plan to continue Government support for businesses by paying 80% of the wages of staff on furlough leave and employers paying only for employer National Insurance contributions (NICs) and pension payments for the hours not worked. 

The ability to continue to flexi-furlough remains in place, but the hours worked must be covered by the employer.

‘When we extended the scheme in November, people and businesses asked what would happen next, and this announcement is to give them certainty going forward,’ Mr Sunak said.

He said the Treasury would review the scheme in January, to assess the ability of employers to increase their contribution. 

The Job Support Scheme (JSS), which was to replace the CJRS, has now been discarded, but the continuation of the CJRS may well spell out to those still listening and trying to keep up with all the changes that a longer lockdown may be on the horizon. 

Mr Sunak says the extension is in response to the assessment by the Bank of England, who forecast that the significant uncertainty about the time-scale for recovery has heightened the risks against a rapid bounce-back even if the virus comes under some form of control.

Added to this depressing prediction is an offer of £150bn to boost the economy, or rather what will be left of it. Mr Sunak promised the funds would be released incrementally ‘at the appropriate time’ because ‘it’s clear the economic effects are much longer-lasting for businesses than the duration of any restrictions’.

The Chancellor also announced that the next instalment of the self-employed income support scheme (SEISS) for November to January will be increased to 80% of average profits up to a cap of £7,500, up from 55%. 

There appear to be no moves to alter the rules however, which place restrictions on the self-employed who had just started up in self-employment. 

Many business leaders are stating this is the first time we are seeing some longer-term thinking, but as far as I can see there is such a small glimmer of hope, its light has been almost extinguished. We need to see a solution for the economy now which goes beyond hopes for gaining control of the virus.

Vanessa Sanders is a partner with Stanbridge Associates, accountancy, finance and tax advisory medical specialists