The mini-Budget boost for small companies
Government cash is on offer for small businesses that retain staff and recruit new workers.


Small and medium-sized enterprises (SMEs) planning to recruit or retain workers as the pandemic eases may now be eligible for support, courtesy of chancellor Rishi Sunak’s mini-Budget last week. It offered firms a range of cash payments if they retain staff and bring in new apprentices.
The money could alter the judgements you make about staffing in the months ahead. Your first decision is how to manage the withdrawal of the Job Retention Scheme, which is being phased out between now and the end of October. The cost of continuing to employ staff on furlough is set to increase steadily until then as the state tries to wean businesses off the support. But at the end of January 2021, you’ll receive a £1,000 bonus for every member of staff you furloughed if they’re still employed at your business.
The cash is designed to encourage companies not to make staff redundant as the furloughing scheme winds down. But bear in mind that you will be responsible for more wage costs from next month, as the terms of the scheme change so that employers become responsible for staff pension and national insurance contributions. There are further changes in September and October – and from November onwards, furloughing ends altogether. In most cases, the £1,000 bonus next year will therefore be relatively small beer compared with the cost of continuing to employ staff currently furloughed until then. Assess whether there is work for your employees to return to and whether you can afford to keep them, even after the cash.
MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
The government has not yet said whether company directors who furloughed themselves will be eligible for the £1,000. In theory, assuming directors have abided by the conditions of the Job Retention Scheme and then return to work, they should be covered. But the small print of the plan has yet to be published.
Bring on the trainees
Meanwhile, England-based SMEs are also entitled to participate in the government’s drive to encourage apprenticeships. From 1 August, you’ll be entitled to a £2,000 payment for each new apprentice you hire under the age of 25 – and £1,500 for each new older one. The scheme runs until 31 January, so for SMEs inclined to hire new staff at junior levels, apprenticeships are worth considering.
Another option is the new Kickstart Scheme, which effectively offers employers financing if they offer work placements. Businesses offering six-month placements that meet certain criteria will be able to claim the cost of paying these recruits for up to 25 hours a week at the national minimum wage, plus national insurance and pension contributions. As with apprenticeships, this could be an affordable way of bringing new blood into the business, with ministers hoping many placements will lead to job offers. Clearly, however, the extent to which you can take advantage of any of these schemes will depend on the levels of demand your business expects. Tough decisions await those businesses that do not anticipate customers returning for some time.
Get the latest financial news, insights and expert analysis from our award-winning MoneyWeek team, to help you understand what really matters when it comes to your finances.

David Prosser is a regular MoneyWeek columnist, writing on small business and entrepreneurship, as well as pensions and other forms of tax-efficient savings and investments. David has been a financial journalist for almost 30 years, specialising initially in personal finance, and then in broader business coverage. He has worked for national newspaper groups including The Financial Times, The Guardian and Observer, Express Newspapers and, most recently, The Independent, where he served for more than three years as business editor.
-
Romance scam nets £428k – the red flags most miss
Love and friendship is big business for fraudsters who tricked unsuspecting Brits out of more than £100 million last year. What can be done about it?
-
‘We’ve saved hundreds of pounds in energy by installing solar panels’
A couple say they have cut their energy bills by hundreds of pounds thanks to solar panels, and they hope to recoup the cost of the installation within a decade
-
David Ellison: America's new media mogul
David Ellison is building a mighty new force in old and new media. Critics worry that he will prove to be a Trumpian patsy. Is that fair?
-
How Next defied the odds and positioned itself as a British high-street staple
Next rose from a near-death experience and now thrives as a high-street staple. What's driving its success – and should you invest in the retailer?
-
Why investors should avoid market monomania
Opinion Today’s overwhelming focus on US markets leaves investors guessing about opportunities and risks elsewhere
-
Can Rachel Reeves save the City?
Opinion Chancellor Rachel Reeves is mulling a tax cut, which would be welcome – but it’s nowhere near enough, says Matthew Lynn
-
Global investors have overlooked the top innovators in emerging markets
Opinion Carlos Hardenberg, portfolio manager, Mobius Investment Trust, highlights three emerging market stocks where he’d put his money
-
Investors should cheer the coming nuclear summer
The US and UK have agreed a groundbreaking deal on nuclear power, and the sector is seeing a surge in interest from around the world. Here's how you can profit
-
Healthcare stocks look cheap, but tread carefully
Shares in healthcare companies could get a shot in the arm if uncertainty over policy in the US wanes, but are they worth the risk?
-
The Palace of Westminster is falling down
The Palace of Westminster is in need of repair, but the bill is prohibitive, says Simon Wilson