This week's opinion: 1 October 2020

What are we to make of the latest set of support measures? Richard Curtis takes us through the details on page 20, but I want to make a broader point here. 

Under the furlough scheme, employers had a simple choice to make – keep people working or send them home and claim furlough. Now the choice is more nuanced. If I employ three people but have enough work only for one of them, what do I do? I could make two redundant and pay the third their normal wage to do the work. Or, I could use the new scheme to keep each of them in part-time work. That will be a more costly option: I would have to pay 55% of their normal wage to each of them to qualify for the grant. The total cost would be 165% of a full-time equivalent. I would need real confidence in the future of my business to bear that extra cost for the six months of the scheme – in particular because if I make the wrong decision, I will not be able to make any of the staff redundant.

We are going to have to do a lot of work helping clients to understand the implications of the new scheme. This will be more than number crunching – it will involve difficult conversations about the future prospects for their businesses. 

If we add to this the complications created by the new rules for spreading tax payments, we are going to be busy over the winter. Good news, of course – but only if we are paid properly for the work. A lot of advisers did not charge for furlough applications. That would not be a viable approach to the new schemes: early engagement with clients will be essential.