Chancellor Rishi Sunak announces new measures to help businesses post-lockdown
Rishi Sunak announced late last week that the Coronavirus Job Retention Scheme (CJRS), which was introduced as the coronavirus pandemic swept across the UK, will be wound down ‘flexibly and gradually’ until October. However, the Chancellor of the Exchequer also revealed new measures at the same time in a bid to kickstart the UK economy post-lockdown.
Alongside a pause on Stamp Duty and a VAT cut for the hospitality industry, Sunak announced a new ‘jobs retention bonus’ to all employers that brought furloughed employees back to work, as opposed to keeping them off or making them redundant entirely, before January 2021. For businesses to get the bonus, the employee must be paid at least £520 on average, in each month from November to the end of January.
“If you’re an employer and you bring back someone who was furloughed – and continuously employ them through to January – we’ll pay you a £1,000 bonus per employee,” he said during the House of Commons briefing.
“We’ll pay the bonus for all furloughed employees,” he continued. “So, if employers bring back all nine million people who have been on furlough, this would be a £9 billion policy to retain people in work. Our message to business is clear: if you stand by your workers, we will stand by you.”
Chancellor Rishi Sunak combats hardship for employers, but more needs to be done for the self-employed says Andy Vessey
During the briefing, which was reported as a ‘mini-Budget’ in mainstream press, Sunak said that no one would be ‘left without hope’ and that the government would do ‘all they can’ to keep people in work – despite acknowledging that hardship lay ahead and with a distinct lack of any support designed specifically with the self-employed in mind.
The Chancellor announced a £2 billion scheme of taxpayer-funded work placements for 16-to-24-year-olds on Universal Credit and at risk of long-term unemployment, a £111 million programme of unpaid traineeships combining work experience with training, and a £3 billion green package, with grants for homeowners and public buildings to improve energy efficiency.
While all of the above is certainly welcome, the government still need to do more for the self-employed says Andy Vessey, Head of Tax at Kingsbridge.
“The Chancellor announced some ambitious measures to start patching up the economy this week, including grants and bursaries to kickstart spending,” he says. “Rightly so, he’s put plans in place to incentivise businesses to bring back furloughed staff, a £1k grant for every retained employee, and a £2k grant to SMEs that take on young trainees. Other welcome provisions were a VAT cut for hospitality and a Stamp Duty holiday.”
“However, it’s disappointing that there still seems to be no help for the self-employed,” he continues. “Contractors are right to feel kicked into the long grass, with minimal support having been made available to them since the start of lockdown. Having spoken to PSCs myself, it’s heart-breaking to hear many are quitting self-employment – which is one of the most rewarding ways to earn an income – because they’ve simply run out of money, and no rescue appears to be on the horizon.”
Andy Vessey warns recruiters and clients not to put IR35 on the backburner amongst COVID recovery
Another thing affected by the coronavirus pandemic was the private sector IR35 reform, which was delayed to 2021 after being seen as an unnecessary hurdle for the UK labour market should it be implemented in April 2020 as intended. Despite the 12-months of extra time, Andy Vessey also warns recruiters and clients not to put preparing for the reform on the backburner.
“Very disappointing result regarding the MP vote during the Report stage of the Finance Bill to delay the private sector IR35 reform by another 2 years,” he wrote in a LinkedIn post. “It would appear that, despite all the campaigning, concerns from MPs of all colours, rife myopic blanket determinations from end clients, and the scathing report from the House of Lords, the IR35 reform will be going ahead in April 2021.”
“It’s now of utmost importance that all points of the supply chain set preparations for the reform in motion, take the time to understand the risks associated by not having the correct processes in place, and educate themselves how to assess contractors fairly,” he continued. “Don’t shoot yourselves in the foot with gross risk-aversion – UK companies will absolutely need to utilise flexible workforces now more than ever to get the economy engines firing again in a post-pandemic landscape. Very few will have been left unscathed by lockdown.”
How Kingsbridge can help you get ready for the reform
It’s crucial that all points of the supply chain understand their IR35 position with every contract taken on or filled. Getting a professional IR35 employment status determination is pivotal to making sure you know where you stand, while IR35 investigation insurance is also a worthy investment and can provide a lifeline should you fall foul of an HMRC enquiry.
A good policy will include an IR35 status determination, as well as cover for the unpaid tax debts, interest, fines, and legal fees, and will flex with the reform roll out to cover the contractor, recruiter, and end client. Our IR35 Protect product offers the above in one comprehensive package.
For more information on how Kingsbridge can assist your business in preparing for off-payroll 2021, or for a demo of our market-leading status determination tool built specifically for recruiters and end clients, please email IR35@kingsbridge.co.uk