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Ascot – Cooking With Gas
The Ascot (marketing services) Group that serves the glazing industry is ‘cooking with gas’ by joining elite businesses in employing 100 people...
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Job Protection & Self-Employment Income Support Schemes
The Job Protection Scheme will be extended until October. The news was met with relief by thousands of businesses. Here we look at what influencers have said about the scheme.
Insight Data’s Jade Greenhow says: "Chancellor Rishi Sunak ripped up the fiscal rule book when he launched the initiative back in March, which pays 80% of furloughed workers’ wages, up to a maximum of £2,500 per month. That could result in a total price tag approaching £100 billion – an almost unimaginable figure.
"But while the cost will be enormous, with the country facing recession (albeit one economists hope will be relatively short-lived), very few would argue that the intervention isn’t urgently needed."
Summit figures
Greenhow continues: "Figures gathered by The Glazing Summit indicate that 65% of companies in our sector furloughed more than three-quarters of their workforce during the lockdown, while over 90% had made use of the scheme in some capacity.
"That obviously includes fenestration and construction – and now thousands of business owners in our industry find themselves facing a dilemma.
What happens next?
"Businesses want to get up and running again – which requires un-furloughing workers who’ve previously been paid using the Job Protection Scheme," says Greenhow. "But at the moment, the state of the market isn’t clear. How much demand will there be? And will it be enough to pay the wages?"
Difficult decisions
A quarter of businesses using the Job Retention Scheme say they will struggle to contribute to furloughed workers’ salaries from August, in a new survey from the Institute of Directors revealed at the end of May.
In a survey of almost 700 company directors, around half of those using the Job Retention Scheme for their staff said they could provide 20% or above toward furloughed workers’ full-time salaries between August and October. However, a quarter said they could not afford any amount.
Over a third of those using the Job Retention Scheme said they would bring the majority of their furloughed workers back part-time, when the scheme allowed it. Less than one in ten said they wouldn’t bring anyone back part-time.
To protect jobs, the institute called for as much flexibility as possible in the system, with the majority of those polled who had staff on furlough saying they would make use of shorter minimum furlough periods if allowed. Currently, workers must be on furlough for at least three weeks, making it difficult for firms to react to uncertain demand.
Reacting to demand
"Deciding how much of the workforce to take off the scheme will therefore have to be a careful balancing act," continues Insight Data's Greenhow. "Companies will want to un-furlough enough staff to cope – especially if they have to deal with a lot of pent-up demand from the lockdown months – but not so many that they’re left struggling to pay the bills if the market is still very sluggish.
"To some extent, the decision will be partly made for them – social distancing means businesses physically won’t be able to accommodate the same number of people they had on site before the crisis, which will put an upper ceiling on the amount of workers they can bring back."
More flexibility to come
From August, the government will be making the Job Protection Scheme more flexible. Employers will be able to furlough workers on a part-time basis – meaning they can work as normal a number of days a week, while still being furloughed the rest of the time.
Greenhow adds: "This is a very significant step. It will help companies get back on their feet by giving them access to their workforce when they need it, without giving them the full burden of their payroll before they’ve got enough business to pay for it.
"However, that flexibility will come at a cost. From August onwards, businesses will have to pay a quarter of furloughed workers wages, and restart paying National Insurance."
For a free demo of Insight Data's Salestracker, call t. 01934 808293 or email at hello@insightdata.co.uk
Scheme closure
Commenting on the Chancellor’s announcement on 29 May of additional changes that will be made to the Job Retention Scheme from July onwards, British Chamber of Commerce Director General Adam Marshall said: “The Chancellor has listened to business communities and struck a careful balance that will help many firms bring furloughed staff back to work flexibly over the coming months. The gradual reduction in furlough contributions from the Treasury will give businesses additional time to rebuild their income streams and cash flows and the decision to give businesses maximum flexibility to bring people back part-time will be appreciated.
“The furlough scheme has helped companies preserve millions of jobs through lockdown, yet many firms still face significant uncertainty ahead. On that basis, closing the scheme to new applicants in June feels premature and risks undermining some of the work already done to preserve businesses and jobs."
On extended support for the self-employed
Marshall continued: “The extension of support for the self-employed will come as welcome relief for those who have seen their livelihoods impacted by the virus. It is right that this group continues to receive similar levels of support to those on PAYE.”
Adapt the workplace
The Institute of Directors has called on the government to provide targeted financial assistance for SMEs needing to make health and safety adaptations to their workplaces. Around 1 in 3 business leaders polled said financial support for adjusting workplaces would help get their organisation operating safely under social distancing, second only to better clarity around commuting on public transport.
Jonathan Geldart, Director General of the Institute of Directors, said: “Business leaders know that the government’s support can’t be infinite, however the ugly truth is that if there’s no money coming in the door, many firms will be forced to make difficult decisions come August.
“Companies are innovating, creating new ways of working and launching new products. There is hope that as more areas of the economy return to work, more companies can keep people on board. However, despite best efforts, many firms simply won’t be able to work at full capacity for the foreseeable future, and there’s no magic wand to lift demand back up again.
“The Government must soften the blow by introducing as much flexibility as possible into the furlough system. The more flexible the scheme is, the better firms can recover, and the fewer jobs will rely on state subsidy. Being able to bring people back part-time will help a lot of companies, yet there are other changes business leaders would like to see, such as reducing the minimum furlough period.”
Self-Employment Income Support Scheme
SEISS has been introduced to help the self-employed, including members of business partnerships.
The scheme has now been extended for those individuals whose trade continues to be or is newly, adversely affected by Covid-19. Eligible people will be able to claim in August.
To find out more about the Self-Employment Income Support Scheme you can join one of HMRC's webinars which takes you through the aim of the scheme, who can apply, how much you may be entitled to, how to apply for the first grant and what happens after you’ve applied.
Picture: As the Job Protection Scheme morphs, more workers in offices, factories, warehouses and on construction sites can come back on a part-time, part-furlough basis but employers will have to make a substantial contribution to their wages.
Article written by Cathryn Ellis
03rd June 2020