13 May 2020
We welcome the extension and increased flexibility of the Government’s Job Retention Scheme until the end of October. This will provide a lifeline for many companies and employees as they begin to scale their operations back up in a new, ever-changing environment.
While we recognise that the furlough scheme cannot go on forever in its current form, we are concerned that some sectors (e.g. hospitality, leisure and travel industries) will not be able to go back to work within the Government’s estimated timeline. Therefore requiring businesses to pay a portion of their employees’ salaries while they have no income will lead good businesses to fail and trigger mass redundancies across these sectors. This is why in the future we would like to see the Job Retention Scheme adopt a sector by sector approach, the Government should continue to provide support to businesses and people most impacted by the crisis and unable to resume to “business as usual”.
Additionally, the Government should allow greater access to the Coronavirus Self-employed Income Support Scheme and Coronavirus Job Retention Scheme for SME business owners so they can get some much-needed financial support for themselves and their families. It should ensure that it truly reflects their earnings over the past three years by allowing them to have their dividends considered alongside their PAYE using the definition of ‘Close Company’ (five or fewer participators) in the Corporation Tax Act 2010.
Should new lockdown measures need to be imposed in the future, we hope that the Government will continue to stand behind businesses and people by adapting its approach to the new economic reality.
Andrew Harding, FCMA, CGMA
Chief Executive — Management Accounting
The Chartered Institute of Management Accountants, part of the Association of International Certified Professional Accountants