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Furlough extension has brought relief - but lockdown could still spell disaster for many, predicts expert

PUBLISHED: 00:46 05 November 2020

The same groups will fall through the cracks as last time and businesses will be closed during the crucial run-up to Christmas, points out Shaun Davison   Picture: RACHEL EDGE

The same groups will fall through the cracks as last time and businesses will be closed during the crucial run-up to Christmas, points out Shaun Davison Picture: RACHEL EDGE

RACHEL EDGE

It’ll be an austere Christmas for many – in spite of a more generous support scheme for workers stuck in lockdown, an East Anglian accountancy expert believes.

Lovewell Blake tax specialist Shaun Davison  Picture: NEWMAN ASSOCIATES PRLovewell Blake tax specialist Shaun Davison Picture: NEWMAN ASSOCIATES PR

The second four week lockdown (starting Thursday, November 5) has triggered a more generous furlough scheme extension than many expected – and the self-employed eventually got similar support, explained tax specialist Shaun Davison of regional accountancy firm Lovewell Blake.

“Employers and their employees will feel relieved about the level of support being offered,” said Mr Davison.

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And it will mean that the less generous Job Support Scheme (JSS) which was supposed to kick in at the end of the original furlough period to October 31 will now be delayed, he added.

“The move will actually see a rolling back to the more advantageous position employers enjoyed in August.

“Furloughed staff will receive 80% of salary up to a maximum of £2,500 a month, with employers only expected to contribute National Insurance and pension contributions.

“The scheme is open to employees who were on the payroll on or before October 30, indicating that employers can claim for new employees who have not been furloughed up to this point.”

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Businesses which are forced to close will also receive grants worth up to £3,000 per month, based on their rateable value.

But those which are not within the business rate system will have to rely on the discretion of local authorities when it comes to whether they will receive business support grants, he explained.

But while the position for employers is better than many had hoped, as lockdown is set to coincide with the key retail and hospitality pre-Christmas period, it could still prove disastrous for some businesses, he warned.

“The newly self-employed and owner-managed businesses will not receive any support at all, and may be questioning why they have once again been left out,” he said.

“There is no indication of what will be put in place after December 2, when the lockdown will be reviewed.

“Despite the extension of the Coronavirus Job Retention Scheme (CJRS), there will be many who will be contemplating a rather austere festive season this year.”


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