Rumour has it that Rishi Sunak may extend the Job Retention Scheme past the 31st October, but rules may change surrounding who is eligible and how it will be implemented.
As discussed in The Times on Wednesday, ministers are bracing themselves for a flood of job losses when the Furlough scheme ends at the end of October.
Its expected that a flurry of job losses will be announced shortly, as we approach the end of the CJRS scheme.
Sunak has been clear that he will not extend the Job Retention Scheme, which has cost more than £27 Billion, however he has told MP’s that he will continue to “act in creative and effective ways to support jobs and employment”.
This could mean that Rishi plans to carry on with a similar type of scheme as the CJRS, but it could be targeted more towards sectors which are still not able to operate due to Coronavirus, or implement a Furlough scheme for employees who can not work as a result of any local lockdowns.
What we do know so far, is Government have considered introducing a furlough type payment to employers every 3 weeks while they remain unable to work, should their business be affected by any local Covid-19 lockdown measures.
Some accountants have speculated however, that The Chancellor may go one step further and consider extending furlough, whereby HMRC will pay 50% of employees wages, while the employer tops up the other 50%.
September sees the reduction in Furlough pay HMRC will pay employers, previously 80% down to 70%, with the employer making at least a further 10% contribution, and in October this will drop once again to 60% with the employer picking up the tab of the remaining 20%.
Employers can no longer claim any Employers National insurance contributions or Employers share of the Pension Contributions they pay towards employees Pension schemes.
While any extension to the furlough scheme will be welcomed by employees, most believe that this is just delaying redundancies.
And what about the Self Employed? They received SEISS (Self Employed Income Support Scheme) payments in June and August, and now the Chancellor has announced two further payments for November and February, but this time they will be based on 20% of your average monthly net profit, as opposed to the first and second payments being at 80% and 70%.
It’s unclear where the additional funds will come from if The Chancellor does decide to extend CJRS in some form or another, but so far Government have continued to try and help businesses by Business Rates payment holidays, Rate Relief Grants, CBILLS and Bounce Back Loans.
There is also an SME Recovery Grant, which we wrote about previously, that can also help small business to pay for financial support.
Whatever the outcome is, its clear that we are far from getting back to where we were in economic terms, prior to lockdown in March, and is likely to take until spring of 2021 before we see any similar growth.