Coronavirus

MHA partner calls for ‘furlough extension’ to aid small businesses

In light of the ‘Freedom Day’ delay to 19 July, MHA partner Adam Patron said that the government should ‘postpone’ changes to at least 31 July and continue paying 80% of furlough employee’s salary, without asking for employer contributions

Adam Parton, corporate and payroll partner at MHA, has called for “greater support” from the UK government to ensure small businesses remain “financially stable” as business relief initiatives, such as the furlough scheme begin to wind down in July. 

From 1 July 2021, businesses will be required to pay 10% of their furloughed staff wages, with this figure rising to 20% in August – before being totally removed on 30 September. 

In light of the ‘Freedom Day’ delay to 19 July, Patron said that the government should “postpone” these changes to at least 31 July and continue paying 80% of furlough employee’s salary, without asking for employer contributions. 

 The partner said that failing to extend the scheme would be “another hard hit for businesses”. 

He said: “While the furlough scheme in particular should be extended, concerns remain over potentially fraudulent use of the initiative, with HMRC confirming over 13,000 cases are currently being investigated. 

“There’s no easy way to prevent possible miss-use of the scheme, aside from having a more rigorous policing of the businesses that are taking this support.”

He added: “Extra checks could include looking at whether businesses are amassing debt that could never be repaid, whether staff that should have returned to work are remaining on furlough or whether their roles are already redundant.”

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