By Paul Weber, Society of Professional Accountants board member
The end of the furlough scheme is nigh. Chancellor Rishi Sunak admits it “cannot and should not go on forever” and will be phased out completely by 31 October 2020, barring a second spike in the number of COVID-19 cases and any subsequent lockdown.
Statistics from HMRC show that around 85% of all employers in the UK have taken advantage of the scheme, which originally operated for three months and enabled them to obtain grants to cover up to 80% of a furloughed employee’s wages – up to £2,500 a month.
It has been tweaked and extended ever since, and closed to new entrants on 30 June 2020, meaning the scheme will only be available until the end of October to employers that are already using it.
That point in time should mark the end of an era for the unprecedentedly high levels of support our members have provided to their clients, but those businesses will still need help to make the transition from relying on the furlough scheme to establishing whatever the new norm looks like.
Is your practice prepared?
November is usually a busy time of year for our members, many of whom will have their hands full with tax returns ahead of the self-assessment deadline on 31 January.
This autumn might be busier than usual in the run-up to the 2019/20 deadline, given some taxpayers deferred payments on account in July. Those need to be settled in full on or before midnight on 31 January 2021.
At the same time, your practice will be expected to advise on the Chancellor’s “plan for jobs”, a phrase Sunak mentioned no more than 11 times during his recent economic statement.
Around 1.2 million of the UK’s 1.4 million employers have used the job retention scheme, and that should represent a large proportion of your clients who may be eligible for a new one-off payment.
The job retention bonus offers employers a £1,000 lump sum for every furloughed employee they bring back to work and keep on payroll until the end of January 2021.
Those employees must earn, on average, above the class 1 NICs lower earnings limit of £520 a month. Grants should be available from February 2021.
Young people subsidies
We expect a lot of employers to come to you for advice on the Government’s ‘kick-start scheme’ and the new cash incentives for them to take on apprentices in their businesses.
The kick-start scheme will subsidise the costs of employers offering six-month work placements to 16 to 24-year-olds who are in receipt of Universal Credit. The Government will cover the costs of paying them the minimum wage for up to 25 hours a week, plus NICs and workplace pension contributions.
In addition, a new £2,000 payment is available to businesses in England taking on apprentices under the age of 25. This payment falls to £1,500 for firms that take on apprentices over 25. This scheme runs from August until 31 January 2021.
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