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Industry calls for immediate Tax and National Insurance deferment as thousands of layoffs loom-Urgent package needed within days not weeks warns sector

Britain’s manufacturers are calling for an immediate deferment of VAT, PAYE and National Insurance payments as part of a package of measures, as the prospect looms of companies having to lay off thousands of skilled employees.

The call was made on the back of distress signals it has picked up from manufacturers across the country over the last week. While the measures announced by the Chancellor on Tuesday were extremely welcome they will take some time to feed through into the system, whereas measures which will have a more immediate impact will help employers’ cash flow and enable them to retain staff.

Make UK’s Q1 Manufacturing Outlook survey published on Monday showed that even before the escalation of the Covid 19 crisis export orders had slumped and turned negative for the first time in three years, while domestic orders were enduring their worst run since 2015.

The particular measures Make UK is calling for include:

  • Immediate deferment of VAT, PAYE and National Insurance payments, initially for three months and renew as needed to ease cash flow challenges
  • Extending the financial support of Statutory Sick Pay announced in the Budget – increasing re-imbursement from 2 weeks eligible per employee to a longer period, and increasing the scope of the size of the company from 250 employees to businesses of all sizes
  • Financial support for employers for their employees’ wages as a result of lay-offs and short time working, similar to schemes in France and Germany
  • Extend the valuation cycles for DB pension schemes which are expected to be valued in the next three months.
  • Extend the period for which businesses are required to publish accounts and withdraw penalties for late reporting this year.


Stephen Phipson, Chief Executive of Make UK, said:

“There are alarm bells going off right across the manufacturing sector with the prospect of substantial lay-offs looming. Order books are collapsing and this is creating immediate cashflow issues for companies which need addressing within days not weeks.

“The measures already announced by the Chancellor are welcome but, events are so fast moving that we need to go further. As such, we need urgent measures which will have an immediate impact on the ability of companies to stay afloat during this crisis and retain their staff.” 

News / Make UK / Coronavirus