December 09, 2020
The extension to the Furlough scheme (under the Coronavirus Job Retention Scheme / CJRS) has been received with mixed feelings of relief as well as frustration. The government’s stance has been hailed to be as ambiguous as ever for hadn’t the chancellor in September spoken against furlough as being ideal thanks to its instance of holding employees on no longer viable jobs? However, it also serves to underline the government’s priority on keeping public health on first base. The financial repercussions are certainly there and the economy has faced losses but the government insists that the winter is to be harsh and so to lower the blow furlough has been reintroduced again not for just a month but will instead continue till March 2021. The virus has been unpredictable which is why the government has been forced to backpedal and change its stance time and again. This is most apparent in the first to be extinct Wage Subsidy Scheme and now redundant Job Support Scheme.
What will furlough cost the government?
The very conception of furlough was more at the spur of the moment along with the reclaim of SSP towards Covid 19. As per the estimates of the Treasury, saving lives and jobs will not prove cheap to the government as per 1 million of people on the scheme the cost is set to be about 1 billion. Figures till March however, have not been published as of now. The extension to furlough has become a trend with this being its 3rd extension if you count the fact that the furlough scheme was to end on 2nd December 2020. As per the estimates from the Bank of England, about 5.5 million employees are expected to be on this scheme only during the November phase of the extension. Furlough at 80% reclaim in no way is cheap which is why the ministry had previously objected to it but considering the new lockdown and the predictions of a second wave of infections one does wonder how much choice has the virus really provided to the government? Putting public health first and ensuring jobs are retained while thinking on one’s feet is not easy. Unfortunately, some claim that self-employed persons haven’t been given as much attention though the government has tipped the scales as far has extension as help goes; in that direction as well.
However, frequent changes can prove detrimental if we count the increase that was noted in redundancies as the furlough scheme drew to its close in October. Perhaps in reaction to this the government realised that the moment was right not right to do away with furlough that to in the light of the next lockdown.
Who is eligible?
NOTE: The revised furlough scheme indicates that even those who have been made redundant post the 23rd of September can be put on furlough if they resume working.
What can employers claim?
How to claim?
CJRS Compliance Checks – Why it is safer to have your accountant process furlough claims
One cannot deny that furlough has addressed the need for the hour for countless employees as well as employer. However, due to its complexity and the unfortunately changing instructions, furlough has become a challenge for employers to process. It has been estimated that 9.6 million UK residents have benefited from the furlough scheme so far. HMRC has found that from the conception of furlough to the middle of August 2020, £3.5 billion or at least 10% of these monies have been wrongly or misleadingly claimed. Due to this the HMRC has now actively launched CJRS compliance checks.
So, what do you do if you receive such a notice from the HMRC requesting for detailed calculations, information and figures? This is where having an expert to do this task can be a great assistance and also grant you some respite from stress. Doshi Accountants does not only deal with accountancy and tax services. Being a one stop accountancy services firm that can deal with queries from your self-assessment to MTD and even furlough, Doshi Accountants can ensure that your business remains compliant to the changing furlough norms. If you find yourself under an investigation, we can assist in sorting out the facts as the HMRC would not impose any penalties if they find the error to have been due to ignorance. Thus, with an expert by your side navigating through the changing legislation will become indeed easier.