Government schemes, furlough, redundancy and accounting

17 November 2020: ICAEW Insights highlights several key resources to help members remain resourceful, adaptable and innovative in times of crisis.

Businesses had to make tough decisions in the period of local restrictions leading up to the expected end of the Coronavirus Job Retention Scheme (CJRS), particularly where they believed the Job Support Scheme wouldn’t work for them and the Job Retention Bonus seemed too far in the future to be useful. Many have worked hard to adapt their businesses to new restrictions or had to make heart-wrenching decisions about staff.

Then national lockdown II happened, the government set aside the Job Support Scheme, suspended the Bonus scheme and extended the CJRS to March 2021. There was then the uplifting news of a potential vaccine.

This ongoing uncertainty and scheme changes may make decision-making and corporate reporting more complicated. For example, some may have already built forecasts around receiving the Job Retention Bonus. The suspension of this scheme may mean some planned expenditure may now need to be reviewed, some forecasts reworked, some corporate reports redrafted and some audit work revisited. Also, some may have submitted applications for loans with the Bonus included in the information, and there may be a concern they now may not get the loan they need, or it will delay the cash. 

These changes may well add to the anguish already felt by businesses in what is a particularly stressful time. We know members are resourceful, adaptable and innovative in times of crisis. ICAEW is always looking to help members and member firms with urgent issues where we are uniquely positioned to do so. 

Our first port of our call is always to see if resources already exist to help members think through issues. For example, on staff matters, the CIPD has created a helpful coronavirus factsheet on how to approach personnel issues, highlighting that the usual rules on employment remain unchanged. 

The 2020/21 reporting season may also have its own challenges. We’re here to help members by responding to their urgent questions, particularly on accounting, reporting, tax, legal obligations and explaining access to government schemes and wider forms of finance.

To help, we have created the financial reporting coronavirus hub, which includes a range of resources which we will add to over the coming weeks and months. 

Also, on 19 November, the Tax Faculty is hosting an open webinar on how to navigate the latest version of the CJRS (click here to book).

And of course, if you have additional questions or concerns not covered by current guidance, please get in touch.