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Fresh Threads: Furlough, lockdown, qualifying for relief, online stores

  1. James Martini

    James Martini UKBF Ace Staff Member

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    Hi UKBFers,

    Welcome to Fresh Threads, our weekly roundup of the best comments and advice from the forums. 

    Here are my top picks from this week.

    1. Furloughed workers


    HMRC is to reimburse 80% of furloughed employees' wages up to £2,500. This implies, to me, that the employer will be required to contribute 20%.

    Looking online, a 'furloughed worker' cannot do any work at all - even answering a call or sending an email breaches their status. On one hand I assume HMRC will rigidly apply this definition, on the other hand it wouldn't seem unreasonable for an employer to expect a pro-rata (eg 20%) amount of effort from a 'furloughed worker'.

    I understand this legislation has been rushed through and applaud the Government for taking this step. I just want to ensure my understanding of the rules is correct, so I can make the correct decision for my business and its employees.

    UKSBD: That was my reading of it, too. The employer will still have to pay 20% of the wages, plus the employee shouldn't do any work for them.

    If it is going to be like that, a lot of business owners are going to be disappointed as they thought it meant the Government was going to be paying 80% of the wage bill.

    Gordon - Commercial Finance: I took to be staff who couldn’t come in, but were unable to work from home. A hotel receptionist, for example.

    lesliedocherty: I read it as the Government pays 80%, the employer can if they choose to, pay the other 20%.

    "Your employer could choose to fund the differences between this payment and your salary, but does not have to."

    Newchodge: This is only for employees who the employer would have laid off (if in their contracts or by staff agreement) or made redundant due to the coronavirus. It is not a lifeline to keep businesses going. It is a lifeline to prevent millions of people having to claim benefits when they are all made redundant at the same time.

    2. Lockdown is coming


    Are others watching the debate [on Monday] in the House of Commons? Looks like lockdown is imminent now.

    GraemeL: Yep, not just cross-party support but active promotion of lockdown by many MPs and the Labour Party.

    MY OFFICE IN CHINA: I doubt it will be a full lockdown. This Government has a knack of nudging it's way to the inevitable, I’m not sure who they're trying to protect. It’s madness that flights continue to come in from all infected countries!

    fisicx: Most of the inbound flights are freight with very few passengers. Lockdown doesn’t stop infection, it just delays things.

    billybob99: Can't see the whole of the UK being in lockdown - London, maybe.

    3. Coronavirus relief: where does my business fit in?


    I'd appreciate some advice. I'm the director of a limited company and I'm on the payroll as an employee. I pay VAT and corporation tax, I don't have premises as I work at home or go to coffee shops etc. I run an e-commerce company with no stock other than a couple of laptops. My official address is a virtual office.

    I used to have a serviced office with SBRR but moved out due to financial problems. I never even thought I had to tell anybody official about home-working.

    Where do I fit in? My business has pretty much died. It seems that everyone but me (and I'm sure I'm not unique) has a grant or 80% or whatever.

    Gordon - Commercial Finance: It looks like the EFG loan scheme might be an option. There’s very limited information out there about any of the options at the moment, so there will be an element of “wait and see”.

    philipthechilip: If you pay yourself using PAYE, would it be possible to pay yourself up to £2,500 per month with 80% covered by the Government? Obviously this may depend on the amount of cash you currently have in the business, and other factors. I'm not sure what the criteria is for this.

    boshy: I'm in a very similar situation as well. Just me and my wife as directors and sole employees and we have only a virtual office, online-based business and we pay ourselves £719 a month. As directors, we're not even considered self-employed so I'm not sure if we'll get any assistance from the Government during these times.

    Urban Retail: I've contacted all lines of credit, HP, mortgage, the lot, and basically said I need three months or I'll have nothing to give them. They were all happy to wait.

    4. Are online stores still OK?


    Following on from the Government’s latest updates on essential shops only to remain open, does this include e-stores and shops? How will the latest updates affect online-only stores?

    Mr D: The way I'm reading it, we are still OK to be open. People can't get infected from this virus while using us and I expect a bigger surge in online shopping than we have been seeing. Our competition has effectively shut down.

    Stedurham: Yep, the businesses that are killing high streets are still allowed to be open. What a shambles.

    bodgitt&scarperLTD: The most important announcement of modern history and two official sources contradict each other. It’s like a scene from Yes, Minister!

    Mr D: @Stedurham The businesses that supply people with what they want, when they want it, are killing the high street? I was under the impression people could decide for themselves where to shop. 

    That's all for this week – have a great run into the weekend!