02 September 2021

Prepare your business for life after furlough and government support

Ensure that your business has strong financial foundations for continuing after furlough.

The furlough scheme is ending, and if you’re still relying on some money from the scheme, now is the time to ensure that your business has strong financial foundations for continuing after furlough.

Preparing for employees returning and the responsibilities that brings financially will be crucial to ensure a smooth transition for you and your team members. You need to prepare for the end of the scheme and a rise in associated payroll costs.


When does the furlough scheme end?

In the 2020 Budget, Rishi Sunak confirmed the furlough scheme would be extended to run until the end of September 2021.  There are no signs of this being extended as the country now recovers from the pandemic.


Financial preparation for the end of furlough

There are several ways that you can prepare your business for beyond furlough.

Review your sales and revenue pipelines – knowing the revenue that will be coming into your business from October onwards is important. Look at your sales pipeline and revenue projections to forecast the income you’ll be generating, and how this will affect your ability to pay the increase in payroll costs.

Consider your cashflow and working capital – cashflow is the lifeblood of your business, so controlling your cashflow will be critical now and as government financial support ends. We can help to prepare cashflow forecasts to help you assess whether your business will have the required working capital to cover your increased payroll costs.

Review your costs and look for savings – if cashflow may be tight or a problem post September, then look now at the areas where you could cut non-essential costs.  Be careful though, not to cut costs that will impact the revenue of your business.

Access additional funding – look at ways to access additional funding to get you over the coming months of potentially having an increased payroll bill. For example, consider the government’s Recovery Loan Scheme which is open to UK businesses adversely impacted by the pandemic.  

Keep a close eye on your finances

Regularly reviewing the financial health of your business, forecasting in advance and considering your new requirements and plans will allow you to act with a clear understanding of your business needs.

Examining future workforce needs

You’ll need to make hard decisions now about your workforce requirements now and for the future. Reviewing your production levels or future customer sales will be is essential to fully assess what people you will need to run your business post September.


Changes in your teams requirements

Many businesses have dealt with significant changes to their business’ circumstances during the pandemic and you’ll have already made difficult decisions around roles and responsibilities. Have you spoken to your team members on furlough? Do they want to return to work? Or do they want to return but on different terms? Have those conversations now to highlight areas of concern for both the business and your employees.


Reviewing your business needs

Working out your future business needs can be difficult, but with a shortage of skilled workers in some areas you need to consider the following:

  • If all furloughed staff are needed back?
  • What roles and skills are needed in the business?
  • If any employees don’t want to return or want to return under different terms?


Managing a return to work

Talk to employees about any plans to end furlough as early as possible. Your employees must receive a notice in writing of their end of furlough. There's no minimum notice period for furlough, but you should consider your employees feelings around return-to-work anxiety and options available to them. Remote working has become more acceptable and manageable during the pandemic, so there may be opportunity for example to reduce office space and associated costs.



If you no longer require all your employees or cashflow tight post September, then you will be faced with some hard decisions regarding losing staff and redundancies.

To avoid any claims of unfair dismissal, any redundancy process needs to be planned. It is possible to make furloughed employees redundant, but you need to be aware legislation ensuring that furloughed employees who are made redundant receive redundancy pay based on their normal earnings.

Addressing the issue as far in advance as possible means that an organisation can fully explore alternatives to redundancies first.


Alternative options post furlough to avoid redundancies

Consider other alternatives for your employees and your business to redundancy. For example:

Reducing hours or place of work – Is it viable to change an employee’s contract temporarily or permanently to amend their hours or place of work? Remember, all changes must be agreed with the employee.

Temporary lay-offs – Some employees may agree not to return to work immediately. This should only be a short-term solution and not a permanent change to agreed working hours and should be agreed by the employee

Change in responsibilities or role -Maybe you could move an employee into a different role if your business needs have changed or you’ve restructured your business. Again, ensure this is agreed and clearly communicated with the employee and the new role clearly defined.

Make sure any changes are documented and you’re updating employment contracts where necessary and getting agreement from the employees.


There is still much uncertainty in the business world right now and the coming months may still be a difficult for some companies. It’s essential to explore all available options, plan and take a structured approach to ensure a smooth transition for the business itself and your employees.

We can advise you on how to prepare financially for the coming months. Contact us at our offices in Chester, Wirral and Liverpool for help in planning your business needs post furlough.