SMEs need further help as furlough rules change

According to the Federation of Small Businesses, SMEs are in need of further help as the furlough wind-down begins.

At the start of the month, employers started having to pay NICs and pension contributions for furloughed staff, and from September, the percentage of employee wages paid through the Job Retention Scheme to furloughed staff will begin to be reduced in stages.

This means that employers will be taking on an increasing proportion of pay for those who are furloughed.

Mike Cherry, FSB National Chairman, commented, “One in five small firms have been forced to let staff go over the last three months. Even with critical emergency measures in place, jobs are sadly being lost in the here and now. As we look to the autumn, it’s clear that we cannot afford to pull up the business support drawbridge any time soon.

“Giving firms £1,000 for every employee they bring back from furlough is welcome, but Job Retention Bonus funds won’t manifest until next year – jobs are being lost today.”

He added, “In addition to job retention, the Chancellor should be looking at job creation. Nine in ten people who moved from unemployment back into work following the crash did so via a small business or self-employment. This recession will be deeper than the last, and the annual cost of running a small business has soared by at least £60,000 since 2011, primarily due to rising employment costs.

“That’s why we’re seeking help for employers where NICs are concerned, either through an uprating of the Employment Allowance or a NICs holiday for firms who employ those furthest from the workplace.

“It’s great that more small businesses in England can finally open their doors after months of no revenue coming in. Further targeted support for those having to remain shut is urgently needed, especially in areas where local lockdowns are in place, as is help for the hundreds and thousands of people – including company directors and the newly self-employed – who have received no support at all for more than 130 days.”

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