Originally written by Timothy Adler on Small Business
Rishi Sunak, the chancellor, is deciding whether to subsidise small businesses giving young people aged below 25 full-time jobs.
Such a scheme, which could be announced next week when the chancellor unveils his plans to get the UK economy moving again, would be similar to the future jobs fund which ran between 2009 and 2010.
The commitment to subsidise young people working for small businesses would be part of an “opportunity guarantee” to ensure that every young person has a chance of an apprenticeship or an in-work placement.
>See also: How to reopen your restaurant, pub or hotel post-lockdown
Young people aged below 25 are the most vulnerable when it comes to the jobs market post pandemic, with the Bank of England estimating 9 per cent unemployment as the country struggles back onto its feet. According to a Be the Business survey published this week, businesses expect to lay off 11 per cent of already furloughed workers, while a quarter have already had to make redundancies.
Although the future jobs fund cost the Treasury £720m when it ran in 2009-10, the Exchequer recouped half its cost through taxes. Yet then prime minister David Cameron axed the scheme, saying
Tag Archive for Coronavirus Job Retention Scheme
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Slash national insurance to keep small businesses hiring, says Sajid Javid
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
Sajid Javid, the ex-chancellor, has thrown down the gauntlet for the Government to increase the national insurance employment allowance to £20,000 for small businesses.
Mr Javid has called for national insurance to be given a “significant temporary” reduction to make it cheaper for small businesses to take on staff.
>See also: How to reopen your restaurant, pub or hotel post-lockdown
“If we want to support and stimulate employment, then axiomatically the best option is to cut the payroll tax — employer’s national insurance,” Mr Javid said.
“Tax employment less, and all other things being equal you will end up with more of it.”
Many fear a coming tsunami of unemployment as small businesses are weaned off the Coronarius Job Retention Scheme, with the Bank of England warning of 10 per cent unemployment as Britain emerges post lockdown.
The proposal to lift the Employment Allowance ceiling is just one of scores of proposals in a paper he has written for centre-right thinktank the Centre for Policy Studies, setting out measures to boost the post-Covid economy.
>See also: How to deal with a furloughed employee who refuses to return to work
The former cabinet minister, who resigned from the Treasury in February, said
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MPs urge Government to do more to help self-employed through Covid-19
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
MPs have urged the Treasury to do more to help the 1m or more self-employed and others who have slipped through the cracks of coronavirus funding schemes.
Rishi Sunak is facing calls to “completely fulfil” his promise to do “whatever it takes” to support the economy after MPs concluded that many newly employed staff, self-employed workers, company directors and freelancers have been “locked out” of the Government emergency rescue package.
The Treasury select committee estimates that many hundreds of thousands of people have already endured several months of financial hardship “through no fault of their own”.
>See also: HSBC handling of bounce-back loans branded ‘shambles’ by businesses
Its report on the gaps in support for economic impact of coronavirus found that hundreds of thousands of people are missing out on support because they started new jobs after the cut-off date for qualifying.
Meanwhile, the self-employed income support scheme is not open to an estimated 225,000 people whose trading profits exceed a £50,000 cap. This includes many working in the creative industries whose earnings are just above the cap.
The SEISS also excludes hundreds of thousands of people who became self-employed too recently to have tax records, along with directors
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What the revamped furlough scheme means for your small business
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
As expected, Rishi Sunak has announced changes to the furlough scheme affecting small business.
August: small businesses will be expected to cover national insurance and pension contributions of workers on the Coranvirus Job Retention Scheme. For the average claim, this represents 5 per cent of the gross employment costs the employer would have incurred had the employee not been furloughed
September: businesses will have to cover 10 per cent of the wage costs of furloughed workers on top of NI and pension contributions. For the average claim, this represents 14 per cent of the gross employment costs the employer would have incurred had the employee not been furloughed.
October: businesses will have to cover 20 per cent of furloughed workers wage costs plus NI and pension contributions. For the average claim, this represents 23 per cent of the gross employment costs the employer would have incurred had the employee not been furloughed
Previously, it was assumed that small business owners would only be on the hook for National Insurance contributions, not pensions as well.
>See also: Small businesses will have to cover a quarter of cost of furlough
In the heavily trailed move, chancellor Sunak will allow furloughed workers
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New entrants to be stopped from joining the jobs furlough scheme
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
Rishi Sunak is to stop new applicants from joining the jobs furlough scheme, in a bid to continue winding the scheme down.
Part-time working from furloughed staff is expected to be allowed from August, following pressure from MPs and retail associations. The government has announced that non-essential shops can reopen from June 15.
However, according to the Financial Times, the chancellor wants to stop new applicants from joining the Coronavirus Job Retention Scheme (CJRS) to stop them from going on furlough and immediately coming back off it to work part-time – leaving the Treasury to pick up the bill.
>See also: Government launches business Coronavirus Job Retention Scheme
Mr Sunak is expected to announce changes to the jobs furlough scheme including asking small businesses to cover 20 per cent of the cost of the CJRS, as well as allowing part-time furlough, by the end of this week.
Currently, 8m people are on furlough, roughly a quarter of the total jobs in Britain.
A quarter of company directors surveyed by the Institute of Directors say they won’t be able to afford to pay even the 20 per cent of the furlough scheme if asked – as well as having to
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Small businesses could have to cover up to one third of furlough cost
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
Rishi Sunak is set to announce this week that small businesses will have to cover anything between 20-30 per cent of the cost of furlough.
Meaning that small businesses will have to fork out £833 per month to keep each staff member on furlough if they’re claiming the full £2,500 amount.
And small business owners will also have to pick up the cost of national insurance contributions on top, on average 5 per cent of wages, says the Times.
According to accountancy firm Wellers, this would cost an additional £245.73 per month, bringing the monthly total for each furloughed employee to over £1,000 a month.
However, the government will still cover the cost of pension contributions. Previously, Bloomberg reported that the Treasury was considering asking businesses to cover both national insurance and pensions.
>See also: Rishi Sunak extends job retention furlough scheme to October
What’s being floated today goes much further.
Unemployment scrapheap
The fear is that many small businesses, especially those in leisure and hospitality, will be forced to throw staff onto the unemployment scrapheap, as the Treasury effectively ends the Coronavirus Job Retention Scheme (CJRS) in August, not October.
The hospitality sector, which will be the very last sector to reopen,
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Businesses may have to cover insurance and pensions of furloughed staff
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
Rishi Sunak could ask thousands of small businesses to cover national insurance and pension contributions of staff on furlough from August.
Earlier this month, announcing the Coronavirus Job Retention Scheme would be extended until the end of October, the chancellor said that businesses would have to share some of the cost with government.
>See also: Rishi Sunak extends job retention furlough scheme to October
According to Bloomberg, one idea under consideration is asking small businesses to share the pain by covering national insurance contributions and auto-enrollment pension contributions of furloughed staff.
Over a million businesses have furloughed staff through the CJRS, which covers up to 80 per cent of an employee’s wages capped at £2,500 per month.
The fear is that asking mothballed businesses to cover national insurance and pension contributions will only hasten the inevitable redundancies when people come out of furlough. The gloomy prognosis is that a million or so workers currently furloughed have already lost their jobs but are being kept on furlough ventilator support.
>See also: Government launches business Coronavirus Job Retention Scheme
The government has been paying 80 per cent of the wages of about eight million workers. CJRS has cost more than £11bn and
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Only allowing part-time furlough work from August doesn’t make sense
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
Shop owners are questioning why the government is only okaying furlough staff to work part-time from August, despite encouraging them to re-open next month.
Small retail businesses face a disastrous couple of months before furloughed staff are allowed to come back part-time, with office workers staying away and restaurants and bars closed.
Kate Evans owns independent fashion boutique Precious, which is based in the City of London and whose customers include City workers now working from home.
Evans said: “With offices and restaurants closed, we don’t know how much demand there will be when we reopen next month. The government says it wants independent retailers like us to reopen. Yet we can’t take back furloughed staff to work part-time during these crucial next couple of months. This all-or-nothing approach doesn’t make sense. The furlough scheme needs to be more flexible to support reopening.”
>See also: Rishi Sunak extends job retention furlough scheme to October
Many independent retailers are planning to reopen on a part-time basis initially.
Lobbyists say that the Treasury to open up the furlough scheme now to allow part-time work in retail, what with demand so weak. By August, many are afraid there will be no shops
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Rishi Sunak extends job retention furlough scheme to October
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
Chancellor Rishi Sunak has confounded expectations by extending the furlough job retention scheme to October at the same 80 per cent support level.
Rishi Sunak said there will be no changes to the furlough job retention scheme until the end of July.
From August part-time working from furloughed employees will be allowed, with employers picking up a greater percentage of the tab. Mr Sunak said that further details will be announced later his month. The chancellor left the door open for part-time furloughed workers to be allowed back before August, providing there was sign-up from unions and business associations.
Mr Sunak said that he expects the scheme to end by November. “Eight months of support is a considerable amount of time,” he said.
>See also: Government launches business Coronavirus Job Retention Scheme
The chancellor said that the furlough scheme has helped 7.5m workers protect their jobs, with over 1m businesses being supported.
Mr Sunak said: “I’m extending this scheme because I want to help the people who need it.”
Shadow chancellor Annelise Dodds said that she’d been taken aback by press reports quoting officials saying that workers needed to be “weaned” off the job retention scheme.
Ms Dodds said: “We will
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Government eyes extending 60% furlough scheme until September
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
Chancellor Rishi Sunak is eyeing extending the Coronavirus Job Retention Scheme furlough until September with Treasury covering 60 per cent of staff wages.
The Treasury is also considering topping up wages of part-time staff taken off furlough as they drift back in to work.
Previously, the chancellor has said there will be no “cliff edge” of businesses having furlough support suddenly switched off as they reopen. Originally, the furlough scheme was set to expire at the end of May, then July, and now, apparently, September.
Prime minister Boris Johnson announced a very limited opening up of the economy last night, with only those who cannot work from home being encouraged to return to work.
Shops could reopen by the start of June, while some outdoor hospitality venues and cinemas may reopen in July – providing the government sees evidence of the coronavirus dying out.
Garden centres and golf courses are other businesses reportedly being allowed to reopen this week.
Ongoing headache
How to wean businesses off the Coronavirus Job Retention Scheme, which currently costs the Treasury £6bn a month, is an ongoing headache for the Treasury. The scheme could end up costing as much over a year as the NHS.