Company owners back re-extended furlough, but press chancellor for more

An extension to the furlough scheme extension -- taking its end date from December 2nd to March 31st 2021, is being embraced for contractors, but their supporters are pushing for more.

In fact, on behalf of PSCs, Forgotten Ltd will today meet Greater Manchester mayor Andy Burnham, fresh from his covid-19 income support tussle with prime minister Boris Johnson.

“We were…led to believe the lack of support from Rishi Sunak was due to ‘administrative difficulties,’” says the lobbyist, referring to the chancellor’s and PM’s ‘dividends’ argument.

“Of course we now know…the situation over seven months in [to the coronavirus crisis, that the lack of support]…is a result of a deliberate policy from Boris Johnson’s government.”

'Lifeline for many'

Ahead of today’s meeting, which will extend to Liverpool metro mayor Steve Rotherham, Forgotten Ltd says it is time for the government to ‘step up a gear’ its support for PSCs.

The wording comes after limited company advisers mostly welcomed the government’s surprise move on Thursday to re-extend the Coronavirus Job Retention Scheme to the spring.

Status firm Qdos called the extra extension “good news”, accountants RoundPeg Finance says it offers “a lifeline for many”, and the IoD deemed it the “right call” from Mr Sunak.

Patrick Gribben, head of client services at Intouch Accounting reflected: “Essentially, HMRC is [going to be] using the same version of the scheme as was available in August .

“HMRC will fund 80% of wages for hours not worked by eligible employees and the employer will need to pick up the bill for Employer NICs and pension contributions.”

'Phased withdrawal'

But pointing to the small print, Tax Resolute says the government states the policy is going to be reviewed in January, to check if employers (including PSCs) ought to put in more.

Reading between the lines is Tim Stovold, partner at tax advisory Moore Kingston Smith: “This seems to indicate an intention for a phased withdrawal of the scheme,” he warns.

“[So] the employer making contributions in February and March 2021, as was the case in September and October 2020 where employer contributions of 10% and 20% were introduced.”

'Critical point'

Jonathan Geldart, director-general of the Institute of Directors, commended the government for sticking with what businesses are familiar with – “furlough…a known quantity,” he said.

But it’s actually code for the institute backing the scrapping of the Job Retention Bonus, which the government has now put off without specifying when it will be introduced.

Chris James, a director at JSA Services says the removal of the JRB (the government says the policy intention behind it has “fallen away”), could be a “critical point” for PSC directors.

“The £1,000-a-worker job retention bonus, which was to be paid in January…is cancelled,” he says. “If you’ve budgeted for it, you’ll need to make some amendments.”

'Whatever it takes'

In his CJRS extension announcement, the chancellor did not draw attention to the etching out of the £1,000 bonus, which he unveiled just a quarter ago at his Winter Economy Plan.

Mr Sunak would only say that the pandemic’s “economic effects are much longer lasting for businesses than the duration of any restrictions” – wording which closely relates to the government’s latest statement on IR35 reform.

The chancellor also said: “I’ve always said I would do whatever it takes to protect jobs and livelihoods across the UK - and that has meant adapting our support as the path of the virus has changed.”

'Serious situation'

But his ‘whatever it takes’ is infuriating many. “Owners [of one-person limited companies] have received very little or no support whatsoever throughout the pandemic,” said Qdos CEO Seb Maley.

“Time is running out for the chancellor to provide the support that millions of freelancers, contractors and small business owners clearly need.

“The fact that the furlough scheme will run for a year shows just how serious the situation is, which begs the question, why has the government cast aside limited company directors for so long?”

'Keep fighting'

“We will not give up the fight,” Forgotten Ltd said in a post to its followers. “We will not be ignored. We will keep fighting harder than ever”.

Reaching out to the mainstream media – but also the chancellor, the lobby group added: “ITV want to talk to us? BBC News want to talk to us? Rishi Sunak brave enough to talk to us?”

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Written by Simon Moore

Simon writes impartial news and engaging features for the contractor industry, covering, IR35, the loan charge and general tax and legislation.
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