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Postponement of Job Retention Bonus puts further cashflow strain on hospitality businesses

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Hospitality leaders have spoken out at their dismay that the Job Retention Bonus will be deferred now furlough has been extended until the end of March.

The bonus for retaining furlough employees, which the government would pay £1,000 for each furloughed employee kept on until the end of January, will now be ‘deferred accordingly’ to coincide with the extension of the furlough scheme until March 31.

For many businesses this will have an impact on cashflow, with the scheme playing a large part in the decision-making process over the last few months, counting on the cash in their projections.

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Robin Hutson, CEO at The Pig group tweeted that the news would be a ‘huge deal particularly for seasonal businesses, who were banking on that Jan/Feb bonus to cashflow their businesses until Easter.”

He added that the deferment of the bonus was ‘quietly slipped through’ by the Chancellor Rishi Sunak.

Another pub and restaurant boss added: “The job retention bonus played a large part in the decision making process over the last 4 months. It had been built into cash flow forecasts and this had allowed us to keep more of the team on the books!”

Last week Chancellor Rishi Sunak announced that the furlough scheme was to be extended until the end of March 2021 as England was placed into a second lockdown. The government will continue to cover 80% of wages.

He also said that the Job Retention Scheme would be scrapped for now and replaced with a new “retention incentive” that would be deployed at an “appropriate time”.

Tags : cash flowfinancehospitalityhotelsKate NichollsrevenueRishi Sunak
Zoe Monk

The author Zoe Monk

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