![The FSB has warned of a 'dangerous moment' for small businesses as Government financial support is withdrawn amid increased operating costs PHOTO Adobe Stock](/media/35tn2dxy/business-woman-with-calculator.jpg?width=1002&height=668&bgcolor=White&v=1da6124273d59e0)
Today (30 September) sees the end of the Coronavirus Job Retention Scheme (CJRS), the withdrawal of the small employer sick pay rebate and the closure of the Apprenticeship Incentive, which the FSB says means that small employers could find their operating environment become ‘less hospitable’ as of 1 October.
It warns that businesses are facing numerous challenges on top of this, including increases in VAT, staff and supply shortages, and energy price spikes.
Furlough
The scheme - commonly referred to as furlough - launched in March 2020. It provided 60 per cent of the wages of furloughed staff.
According to HMRC, around a fifth of employees in businesses with two- to-four staff were still on full or partial furlough at the beginning of September. Small businesses have used the scheme more than large firms.
Coronavirus Sick Pay Rebate Scheme
Alongside testing and vaccinations, the SSP rebate gives employers confidence they can afford the bill when staff fall sick of are told to self-isolate, says the FSB.
While the Government has yet to publish statistics on usage of the scheme, it is believed it is likely to be in the hundreds of thousands.
The Apprenticeship Incentive, offering £3,000 to businesses in England that took on an apprentice, also ends today. It comes after a fall in the number of people starting an apprenticeship.
'The removal of support measures will be tough for many to navigate'
Mike Cherry, national chair of the Federation of Small Businesses (FSB), said, ‘For many small businesses, the end of September will mark a significant turning point. With challenges on many fronts, the removal of some of the support measures brought in to hold off the worst effects of the pandemic on businesses will be tough for many to navigate.
‘It’s potentially a dangerous moment. As the weather turns colder, so too will the operating environment for many firms.
‘Ending the Apprenticeship Incentive sends exactly the wrong signals to the business community about the Government’s commitment to training and skills development. If anything, we need even more apprenticeships in small businesses as we come out of the pandemic. Add in the rumoured axing of the New Enterprise Allowance, and the implied message about the value placed on nurturing entrepreneurship is equally bleak. It seems bizarre that at a time when we should be starting the long road to recovery, the Government is making employment more expensive, making it harder to start a new business, and making apprenticeships less attractive and accessible.
‘Small businesses need to feel the Government is on their side; however, recent decisions made have not had their interests at heart.’
The FSB is calling on the Government to keep the Apprenticeship Incentive in place and to focus this autumn on supporting small businesses to create jobs.
A Government spokesperson said, 'We’ve backed business over the pandemic with billions of pounds of cash grants, tax cuts and tax deferrals – all providing a lifeline to millions of firms.
'As we recover from the pandemic hospitality and leisure businesses can continue to access a reduced of VAT and rates relief through to March 2022, and our Recovery Loan Scheme is in place for all businesses.
'We’re also supporting investment through the tax system: extending the Annual Investment Allowance increase for another year and introducing the super-deduction – the biggest business tax cut in modern British history.'
A Department for Education spokesperson said, 'As set out in the recent Plan for Jobs Progress Update, beyond 30 Sept 2021 the Government will keep the apprenticeships hiring incentives scheme and the broader labour market under review.'