Chancellor considers furlough extension in Budget –

Other support tools being considered are said to include the revival of the £1000 job retention bonus to encourage firms to keep staff on, which was announced in July but scrapped in October when the furlough was extended ahead of the second lockdown.

The CBI has called for an extension of furlough until the end of June and targeted support after that, while the TUC has said it should be available until the end of the year.

The Chancellor also faces pressure from businesses to extend a series of reliefs on business rates and VAT to avoid a cliff-edge at the end of March which could trigger another wave of redundancies.

The Treasury said: “At the upcoming budget the government will set out how we’ll ensure public services continue to receive the investment they need. We’ll also outline the next stages of our plan for jobs to support businesses and families across the UK. That has been our priority throughout the past year and it will be the priority for the year to come.”    

The speculation came as tax experts warned MPs that swathes of small limited company directors could go bust and starve the economy of the “entrepreneurs of the future” after almost a year shut out of Treasury support.

Ministers were urged to find a solution for up to 2m entrepreneurs locked out of financial aid as officials look at proposals for a new income support scheme. 

“Many of them may go bankrupt, many of them may also have to lay off employees,” said Glenn Collins, head of policy at the Association of Chartered Certified Accountants.

“There is some real concern there.”

He told MPs on the Treasury Committee that these “entrepreneurs of the future are important to the UK and for the economy going forward”.

Richard Wild from the Chartered Institute of Taxation warned: “There are risks of them going bust, losing employees and so on… so definitely in need of support.”