Swindon accountant Mike Lloyd, Managing Partner at Haines Watts Swindon, is urging business owners to start planning now for the end of ‘furloughing’ next month.
The Job Retention Scheme enters its next phase with the Government keen to get people back to work during September to support a struggling economy.
Mike said, “This scheme has enabled many business owners to retain their staff during the Covid-19 pandemic, however it is coming to an end within weeks and having a plan is critical.
“This is the time to take stock and plan for the future of your business whether for recovery, growth or both– while you are still able to receive some government support.”
From this month, the Government’s wage subsidy has dropped from 80 per cent to 70 per cent, up to a maximum of £2,190 per month. Employers are already paying National Insurance and pension contributions. From 1st October, it will reduce to 60 per cent, up to a maximum of £1,875 per month. On 31st October the scheme is currently scheduled to close.
Mike says that business owners and directors need to examine several key areas:
· Plan the return to work of any staff who are furloughed and remember a grant of £1,000 per employee can be claimed to support that return..
· Be prepared for conversations around anxiety – To end furlough, an employee must receive a notice in writing and they can ask questions around safety. The key questions would include: Is return to the business premises essential? Is it safe? Is remote working a viable option?
· Do you have a skills gap? – Some business owners may find key members of staff have made personal decisions to leave during lockdown and there may be an unforeseen skill gaps – start recruiting now to reduce the impact on business operations.
· Are redundancies possible? – If the business’s financial health means you are considering redundancy, act with compassion. Are you able to help your employees to find new roles inhouse or elsewhere? Can you avoid redundancies through reduced hours or working flexibly? Employees on furlough can be made redundant, however the process needs to be planned to avoid claims for unfair dismissal.
· Are you growing quickly unexpectedly? – For some business owners this has been a busy time. You may have adapted successfully or your products or services may be in high demand. Do you need to invest in new technology to work smarter? Do you need to increase your marketing budget?
Mike added, “For any business owner facing a return to work at this time, it’s vital to plan for the future whatever the financial circumstances of the business now. To maintain and embed the success you have had, or to sustain a recovery, a financial plan is vital post furlough and beyond.”
Nationally, Haines Watts is a top 15 firm of chartered accountants who specialise in advising and supporting business owners, individuals and not-for-profit organisations locally and throughout the UK. The firm has been at the centre of the Swindon and West Wiltshire business communities for the last 25 years. Mike Lloyd is based in the Haines Watts office in Old Town, Swindon. To find out more about Haines Watts Swindon visit:www.hwca.com/accountants-swindon
Pictured above: Mike Lloyd, Managing Partner, Haines Watts Swindon