(Updated 8 July 2020)

This additional grant appears to be more of a sweetener than an incentive.  If a business can’t make ends meet, then the promise of £1,000 in February 2021 per previously furloughed employee isn’t going to help that business survive until then!

However for some businesses where a significant number of staff were furloughed but are now able to return, this cash injection in February may help as the deferred taxes from this year start to fall due on the 31 January 2021 (for personal tax payments) and 31 March 2021 (for VAT deferrals).

Although details are yet to be released our assumptions are:

  1. The payment is to the employer, not the employee, effectively a thank you to the employer for keeping someone off the jobs market.
  2. Anyone furloughed for a minimum of three weeks between 1 March and 30 June 2020 who are kept on full time between 1 November and 31 January are eligible to accrue a bonus for the employer.
  3. Employees have to be paid £520 per month or more to be eligible
  4. Payment will be a flat, one off payment of £1,000 per eligible employee
  5. Payments expected in February
  6. This will most likely be applied for using the furlough systems already in place.
  7. The payment will be treated as taxable income

Although no one will want to turn down some free money I feel that this is not going to change many of the decisions made by the hardest hit and struggling businesses.

For more information about reviewing staffing and the options you have if you are temporarily overstaffed then please see our article: Options for staffing levels after furlough

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Josh Curties

BA (Hons) FCA

Partner & Principal Adviser

01474 853856

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