The extension of the furlough scheme in last week’s Budget announcement by the Chancellor Rishi Sunak has been described by a Milton Keynes accountant as “a mechanism for the government to kick the can down the road”.
Nishi Patel, Managing Director of N-Accounting, has said the Government should be moving away from the furlough scheme and instead focussing on incentivising businesses to recruit and provide more jobs.
“My personal thoughts are that the furlough scheme made sense for the first three months but has now become a mechanism for the government to kick the can down the road when it comes to dealing with the economy,” said Nishi. “It has also been a mechanism for the government to avoid giving the owner managers of limited company businesses the support they deserve.”
“Really the money would be much better spent helping businesses adapt to trading under the coronavirus and any future virus’s we have to deal with. They could also have spent the money helping employees retrain for industries where there are significant staff shortages.”
He added: “It is a lifeline for the people who rely on it, however it is also the easy option for the government and really, in my opinion, the money should have been spent incentivising businesses who could hire to recruit and create jobs to replace the ones that were being lost.”
As part of the 2021 Budget, the Chancellor announced an increase in the National Living Wage, extended support for the self-employed, increased capital allowances and the doubling of incentive payments for new apprentice hires.
But Nishi says there should have been greater support for companies looking to create more jobs for all those skilled workers searching for employment rather than focusing on apprentices and equipment.
Nishi said: “These changes to capital allowances will push more companies into automation, which makes it an awful budget for growing businesses and for people who are looking for jobs. It is incentivising businesses to automate rather than employ – for regular members of staff, national minimum wage has gone up.
“I haven’t seen anything positive. If you are happy being a small business or employee, then you will benefit from this. But if you are a growing business that is quite labour based, this Budget isn’t going to help at all, which is shocking considering a lot of people will lose their jobs when furlough ends.”
N-Accounting is a specialist in small business accountancy services, providing industry leading tax planning advice and helping its customers get the most out of their accounting software.
To find out more, go to www.n-accounting.co.uk.
