Can Businesses use Furlough Grants to pay other bills and not wages

dirtyvest

First time poster here so I apologise if I have missed this this if it's come up before.

My wife works for a pre-school/Nursey, an area which is already experiencing contradictory issues pertaining to what they can and cannot get relief for during this time due to the combination of public and private funding (it's a small independent setting). While it seems to be 2nd hand information that she is getting through the grapevine it appears there is discussion about the business using the furlough payments to cover other bills and not to pay staff claiming that if they don't do this the place will fold and none of them will have a job to come back to. Management are not responding to any attempts to contact them right now but we are interested to know the legalities of this. So far she has been paid under furlough but the threat does seem very real that this will end soon if they redirect the funds to other sources.

(She has had a confirmation letter from the beginning stating they are all being furloughed etc)

Jeremy535897

Paragraph 2.4 of the Treasury Directive:
"2.4 Before making payment of a CJRS claim, HMRC must, by publicly available guidance, other publication generally available to the public, or such other means considered appropriate by HMRC, inform a person making a CJRS claim that, by making the claim, the person making the claim accepts that-
(a) a payment made pursuant to such claim is made only for the purpose of CJRS (and in particular as provided by paragraph 2.2), and
(b) the payment must be returned to HMRC immediately upon the person making the CJRS claim becoming unwilling or unable use the payment for the purpose of CJRS."

dirtyvest

Wonderful, that is just what she needs to hear and we did suspect (just have to see if the management actually care now)

Thank you very much for the quick reply

Jeremy535897

They will see it clearly when they look at the guidance on how to calculate the claim:

"You must pay the full amount you are claiming to your employee, even if your company is in administration. If you’re not able to do that, you’ll need to repay the money back to HMRC. The same applies in relation to employer national insurance contributions and pension contributions you claim regarding your employee. The full amount you claim in respect of these must be paid or you will need to repay the money back to HMRC.

By making a claim, you agree that:

• the grant you receive can only be used to pay your employee’s salary and the employer national insurance contributions and pension contributions you must pay in relation to the salary paid to your employee
• you will return any grants back to HMRC immediately if you’re unwilling or unable to use it to pay your employee’s salary and the employer national insurance contributions and pension contributions

You must not make the claim if you do not accept that you can only use the money you claim for making those payments and that it must be returned to HMRC if you do not."