Home Business News Loss of Job Retention Bonus is a ‘sting in the tail’ say accountants

Loss of Job Retention Bonus is a ‘sting in the tail’ say accountants

by LLB Finance Reporter
6th Nov 20 2:02 pm

London-based accountancy firm, Grunberg & Co, has welcomed the Chancellor’s decision to expand the furlough and self-employment schemes, but has said the withdrawal of the £1,000 per employee Job Retention Bonus is the “sting in the tail” of the announcement.

Speaking in the House of Commons, the Chancellor, Rishi Sunak, said the furlough scheme would be extended to the end of March – the second time in six days that the scheme has been extended.

On Saturday, just hours before the scheme was due to close, it was extended to 2 December 2020.

The Chancellor also confirmed that employees made redundant before the scheme was due to end on 31 October 2020 can be brought back and furloughed.

At the same time, he said that the next round of the Self-Employment Income Support Scheme (SEISS) would now be worth 80 per cent of a self-employed individual’s average trading income over three months, capped at £7,500 in total. The figure had been increased from 40 per cent to 55 per cent only on Monday.

Robert Bean, Managing Partner at Grunberg & Co, said: “The further extensions to the furlough scheme and the self-employment scheme are welcome announcements that will make a real difference to businesses and the self-employed over what looks to be a challenging winter of heightened restrictions.

“We hope these measures will help put those businesses most affected by the crisis in a position where they can return to full trading as quickly as possible after restrictions are lifted and demand returns to the economy.

“It is particularly welcome that employees made redundant before these latest measures were announced can be brought back and furloughed, potentially saving businesses from the costly headache of rebuilding their workforces as the crisis eases.”

The Chancellor also announced that the £1,000 per employee Job Retention Bonus would no longer be paid to businesses that retain previously furloughed staff until the end of January because of the extension of the furlough scheme.

Instead, he said a new retention initiative would be announced at “the appropriate time”.

Robert added: “The withdrawal of the Job Retention Bonus is a real sting in the tail for employers that took the Government’s promises in good faith and have kept on staff who might otherwise have been made redundant.

“In many cases, businesses have been relying on this expected income for specific spending plans.

“While the Chancellor has committed to a new retention initiative in future, there is no guarantee that this will be worth as much or offered on the same terms.

“I hope the Chancellor will listen to businesses and allow employers that do not use the extended furlough scheme to collect the Job Retention Bonus they had been promised.”

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