Businesses Closing Due to Covid Promised Extra Furlough Support

Written by: Keith Tully

Business closing sign covid-19The government has said it will expand the Job Support Scheme to provide financial help to businesses obliged to close due to coronavirus restrictions.

A significant number of businesses are set to be told they must close down due to increases in Covid-19 rates in various parts of the country, which for many might represent a serious threat to their financial viability.

With that in mind, the chancellor of the exchequer Rishi Sunak has said the government will cover the costs of two-thirds of salaries, up to £2,100 per month, for employees who can no longer work because of Covid-related restrictions.

The chancellor has said the extra support will “provide a safety net for businesses across the UK who are required to temporarily close their doors”.

Plans are for the scheme, which kicks in from November 1st, to remain in place for a period of six months and to function as an extension to the furlough initiative that saw millions of people effectively being paid not to work earlier this year.

The original Coronavirus Job Support Scheme officially closes at the end of October and there have long been widespread fears that its closure would result in mass redundancies and a wave of insolvencies.

Expectations are that the creation of a successor to the Job Support Scheme will go some way at least to rescuing jobs and businesses that might otherwise have been lost over the course of the next six months.

“I have always said that we will do whatever is necessary to protect jobs and livelihoods as the situation evolves,” Mr Sunak has said.

Much of the UK is braced for a tightening of Covid restrictions in the coming days because rates of infection have been sharply increasing.

Expectations are that pubs, cafes and restaurants will soon be told to close their doors to customers as efforts to stop the spread of coronavirus are stepped up nationwide.

Dame Carolyn Fairbairn, director general of the Confederation of British Industry, responded to the government’s latest announcements by saying: “The chancellor’s more generous job support for those under strict restrictions should cushion the blow for the most affected and keep more people in work.

“But many firms, including pubs and restaurants, will still be hugely disappointed if they have to close their doors again after doing so much to keep customers and staff safe.”

“While support is being more closely targeted at certain kinds of businesses, we must be alert to suffering right the way down supply chains,” Mike Cherry from the Federation of Small Businesses has said in a statement.

Keith Tully

Keith Tully

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Keith has been involved in Business Rescue since 1992, during which time he’s worked for both independent and national firms. His specialties include company restructuring matters and negotiating with HMRC on his clients behalf.

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