Can your business afford to pay staff between agreeing furlough leave and getting the Coronavirus Job Retention Scheme grant?
We are in unprecedented times and plunged into a way of life that has been turned on its head. Businesses everywhere are either closing, going into administration, laying staff off, making staff redundant or having to work in a very different way from what the norm was just a few weeks ago.
For some businesses it’s ‘rabbit in the headlights’ without knowing where to turn to. The Coronavirus Job Retention Scheme grant is available to ensure valued, skilled and decent, good people can continue to remain on the payroll, and be paid without having to lose their jobs.
HMRC are still setting up the system which should be available by the end of April, which is welcoming news and gives businesses and employees some certainty and business and household bills can be paid (albeit a reduction in pay, but far better than having no pay at all)
BUT….and it’s a big but….what do you do if your business can’t afford to pay staff between them signing the Furlough Leave Agreement and being able to access the on-line portal and claiming the grant and paying them? We’re possibly talking of a gap between 4 – 6 weeks maybe for some businesses? But the gap is there and how do businesses fill it?
If your business is struggling to fill this gap, there are some options. The Coronavirus Business Interruption Loan supports SMEs with access to loans, overdrafts, invoice finance and asset finance of up to £5 million and for up to 6 years – go to www-british-business-bank.co.uk for a list of accredited lenders.
There is also a grant of up to £10,000 for businesses that pay little or no business rates because of the small business rate relief (SBRR). It’s a one-off grant of £10,000 to help meet ongoing business costs. Eligible businesses will be contacted by their local authority or they may require businesses to submit an application. Check on your local authority’s web site.
Talk to your staff before asking them to agree to Furlough Leave about the possibility of changing working arrangements such has reducing hours, or reducing pay temporarily, or taking unpaid leave. We agree, it’s not an ideal situation and could be an uncomfortable conversation to have, but it could be the difference between retaining skilled people and having to recruit from scratch if your business is able to continue when life gets back to some normality.