Furloughed but employer keeping my money

bradders1983

I assume the employer realises she isnt going to get this furlough money straight away, yes? It may take months.

Francessca

Yes, she realises the furlough money will take months to come through and I expect that is a part of the cash flow problem. This whole thing is a nightmare. I think I'm just going to have to go along with it and hope her business will be saved and trust her to pay me back if and when she can. She's always been very good to us all. Looks like we're all going to have to share the pain to help save the business. 

bradders1983

I thought businesses could apply for a "bridging" loan to cover the gap between now and the furlough money being paid?

onwards&upwards

What kind of business is it?  Do you think there is a good chance of it surviving and bringing all it’s staff back after this?  Because honestly it doesn’t sound like it.

You may just be donating your salary into a black hole of a failing business that sadly can’t be saved, just at a time when you really really need it. 

suki1964

All businesses have cash flow problems at the moment , we won't be seeing any overtime payments for a few months, but the basic wage is still being met where I am, Im in food production, people are still buying, its just a lot of un paid bills from businesses that had to close thats caused problems where I am. Then of course anyone who has had to shut their doors obviously has no income so those un paid bills have to stay unpaid until we are all out of this and back running

I would be wondering as well what business this is and if its closed, why are they needing money other then the wage bill?

gary83

suki1964 said:

All businesses have cash flow problems at the moment , we won't be seeing any overtime payments for a few months, but the basic wage is still being met where I am, Im in food production, people are still buying, its just a lot of un paid bills from businesses that had to close thats caused problems where I am. Then of course anyone who has had to shut their doors obviously has no income so those un paid bills have to stay unpaid until we are all out of this and back running

I would be wondering as well what business this is and if its closed, why are they needing money other then the wage bill?

Businesses need money as although they have no incomings they still have outgoings, they will still be paying mortgages/rent for their premises. Still be charged standing rates for water/electricity/internet etc. Still paying for insurance, paying for vehicles/machinery that’s standing idle.

i take it the employer hasn’t put this badly thought out plan in writing? you’ll have no comeback if the business can’t afford or just wont pay back this taxpayers money intended for you that they’re at best forcing you to lend them at 0% or at worse stealing from you.

running a payroll and declaring that to HMRC with no intention of paying out that money is starting on dodgy ground, what other scams/shortcuts is she upto?

BrassicWoman

there is a government backed loan scheme for employers. that would be far more appropriate than asking you to provide the loans.

InA

BrassicWoman said:

there is a government backed loan scheme for employers. that would be far more appropriate than asking you to provide the loans.

The loan scheme is not suitable for a lot of businesses. Banks are taking the long-term risk, not the Government, no matter what the media spin suggests. Banks can refuse, banks can charge whatever interest rate they like after the initial 12 month interest free period, banks are responsible for assessing this risk. If the business is struggling to the extent that it cannot afford to pay wages, then how likely is it that a bank will approve one of these loans?

I suspect what the Government expects a business to do in this situation is to not offer to furlough staff if they don't have the cash to pay upfront. Hence, the reason it has been repeatedly stated that the various schemes will NOT be able to save all businesses.

Judging by the OP's post it sounds like a decent employer who is just trying to do the right thing by her staff (by offering furlough) although it may land her in hot water depending on how HMRC view this situation (which may well depend on an individual's subjective judgement).

Deferring ougoings can only do so much if there is no money with which to pay staff, and I suspect that is probably what the problem is here.

kingfisherblue

If the comapny goes bust anyway, you won't be able to get the money back. If you then have to claim UC, your initial payment will be reduced because on paper, you will have received a wage.

Francessca

 Thank you everyone. It's small interior design and build business. Customers had already started cancelling before the lockdown in fear of lockdown and not being able to afford a luxury, some mid job. I agree she's a decent employer trying to make the best of a bad job here in the hope the lockdown won't last much longer and her business can survive after the lockdown rather than just lay us all off because she values us all dearly.  I don't think it's right, or fair. But, these are exceptional times.