Experts urge Sunak to extend furlough
Chancellor told Budget needs to boost business
CHANCELLOR Rishi Sunak needs to extend furlough and the Government’s other support measures until the economy fully reopens, or risk killing off jobs and businesses, tax experts warn.
They add that Sunak, who will present his latest Budget on Wednesday, should give every business that is struggling because of coronavirus an immediate boost, by allowing them to offset their losses against profits they made prior to the pandemic.
The Chancellor is expected to outline a number of growth measures and rule out large spending cuts or tax hikes until after the Covid-19 crisis has passed, given the weakness of the economy.
Furlough and its counterpart for selfemployed people are due to stop at the end of April, while businesses have until March 31 to access Government-backed emergency coronavirus loans.
However, as the economy is not scheduled to be fully opened until June 21, tax experts say that ending the support schemes before then would do unnecessary harm. Alvarez & Marsal head of tax Marvin Rust said: “Sunak needs to extend furlough and the other support measures so they match up with the roadmap out of lockdown. That would avoid the awful moment when support is removed and businesses find they have no money coming in because they are still closed.
“If he doesn’t, the risk is that employers will start making decisions about cutting jobs. It makes no sense after we have supported businesses for 12 months.”
Menzies partner Richard Godman said: “The cost of the pandemic is going to be generational, so supporting businesses for another three months is going to be just another one of those things.”
Chris Sanger, head of tax policy at EY, said that “lessons will have been learned”, following last year’s failed attempt at winding down furlough and its subsequent multiple extensions. He added that it may be tweaked so that it is aimed at the sectors worst hit by the pandemic.
“What we may see is a type of targeted furlough. We may see a change in the nature of furlough as we come out of lockdown, but what we will not see is it being immediately turned off,” he said.
One measure that Sunak could announce is allowing companies to use the pandemic losses they have incurred to reclaim the tax they paid on profits they made up to three years prior to coronavirus. At the moment, companies can only offset current losses against profits made the preceding year.
“It’d be a powerful way of supporting businesses that had been profitable in the past,” Sanger said.
TELEMEDICINE group Visionable, which enables doctors and nurses to see patients remotely and securely, is expanding into care homes.
Visionable’s service is currently being used by hospitals, GPS and the prison service and chief commercial officer Davidwalker said it is now deploying its video conferencing systems in care homes.
Aside from being able to contact doctors and healthcare professionals, residents will also be able to use it to stay in touch with loved ones, he said.
Founded in 2015, the British technology company has been working on developing a “smart ambulance” in the US with telecoms group Verizon. Last year it received a £500,000 grant from UK innovation agency Innovate to rollout smart ambulances across the country.
An ambulance crew with wearable devices designed byvisionable would be in constant contact with hospitals, which the company says would result in better, faster decision making and lives being saved. Equipment would relay live data back to hospitals.
Walker said the rollout of 5G is what makes smart ambulances possible, as it allows medics in the field to share large quantities of data with hospitals and specialists quickly.