Planning beyond furlough

Planning beyond furlough

It is generally accepted that following the start of lockdown the only thing preventing many employers laying-off their employees, or otherwise closing their business, was the Coronavirus Job Retention Scheme. But what happens beyond furlough? 

The ability to furlough some, if not all, of an employer’s workforce, will have saved many jobs. For some businesses, this will have simply put off the inevitable. For others it will have provided the breathing space they required.

The recent announcement by the Chancellor that employers will be entitled to claim a £1,000 bonus for furloughed employees, retained through to 31st January 2021, is very welcome.

However, unless the Chancellor comes up with replacement funding for the Job Retention Scheme, and there is no sign that this will happen, those businesses that have maintained their workforce by furloughing staff will face difficult choices when the present scheme closes down at the end of October.

Do they keep staff on in the hope that business will improve? Or is this so unlikely that laying staff off is the only sensible alternative?

Much will depend on the market sector in which that business operates.

Hospitality, tourism and many high street retailers will be especially challenged by the requirements to socially distance and quarantine as uncertainty regarding secondary waves of infection continue to disrupt attempts at planning for the future.

The change in the VAT rate to 5% from 15th July for some businesses, including hospitality and hotels, provides welcome, albeit temporary, financial assistance. There is an argument that this change should have happened in good times, not as an emergency measure in bad times. These sectors have also been materially affected by reduced casual labour availability since the original Brexit vote.

Ironically, it is planning that is required in order to make post-furlough choices.

  • What will be future demand for your products and services?
  • How will your direct and fixed costs be affected?
  • Do you need to shelve investment decisions?
  • And finally, if you can see a way forward, what staffing levels do you need to support the planned activity and what changes – lay-offs – do you need to make?

If you are undecided which way to jump, please call us so we can help you consider your options. Sometimes an objective overview is required, and MJB Avanti can advise you on how the current rules affect you, flexible furlough rules, or the furlough bonus, We would be pleased to discuss and advise you about your own situation.

In these very difficult times, MJB Avanti are offering all new clients a free financial review of their business to include a consideration of forecasting and cash flow management.

Contact MJB Avanti now on: 01473 55 88 66 or email:

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