Chancellor guarantees some amount of pay for employees and defers VAT.
Coronavirus measures welcomed.
The Chancellor’s latest announcements in reaction to the coronavirus crisis have bene met positively by some in the industry. Chief Executive of the Recruitment & Employment Confederation Neil Carberry said: “The Chancellor’s announcement is the big action the REC and many other business organisations has been working hard to achieve all week.
“The key thing now is to make sure the money can flow quickly and simply to the businesses that need it. Cash flow support, VAT deferment and wage payments are the exact radical measures that will help,” he added. “The most important thing now is to implement these changes with great speed. Looking ahead, recruitment professionals have a pivotal role to play in helping people get jobs in sectors where they are most needed at this time such as healthcare, logistics and the food sector.”
Peter Briffett, CEO of the income-streaming provider Wagestream also stressed the benefit of the approach: “This seismic announcement by the Chancellor is incredible news for millions of workers, many of whom are fearing for their jobs or have already lost them.
“Promising to pay 80% of workers’ salaries means that businesses no longer need to lay off entire workforces,” he said. “The fact this pay is backdated to March 1st means that staff who have already been axed can be re-employed and suffer no loss of earnings.
He also sounded a note of caution: “But as always, the proof will be in the pudding, and businesses will want to know how they can get hold of this money from the government.
“The Chancellor didn’t provide much detail on how government departments are going to handle the massive demand for these grants and while businesses wait for the cash injection, staff need the money they are owed now to pay bills and cover urgent food supplies.
“Businesses must investigate the best way to get workers’ pay to them as quickly as possible. Technological solutions like income streaming, where workers access their wages ahead of payday, can help bridge the wait for the government money,” he added.
Elsehwere, David Hough, partner at Blick Rothenberg was also upbeat about the move: “Guaranteeing up to 80 per cent of salary to a maximum of £2,500 for individuals who are not working but kept on payroll is a great boost to people working in the hospitality sector whose hours will decrease in the coming months.”
Alex Altmann, partner added: “The Chancellor finally announces a deferral of collecting taxes, which is the quickest way of injecting cash into the economy. We need to review the details now, but a deferral of paying VAT at least until 30 June is a first right step.”