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Author: Sacha Bright & Oliver Murphy
Speaking at the daily Downing Street briefing, Chancellor Rishi Sunak announced: “HMRC opened the Coronavirus Job Retention Scheme at eight o’clock this morning.”
He added: “As of 4pm, over 140,000 firms have applied and the grants they will receive will help pay the wages of more than a million people.”
It is estimated that the price of the current number of requests is around £1bn, which is expected to rise as more companies apply for help in the coming weeks.
Employers can apply for direct cash grants through HMRC’s new online portal - with the money expected to land in their bank accounts within six working days.
Commenting on news that applications are now open for the government’s Coronavirus Job Retention Scheme, Adam Marshall, British Chambers of Commerce Director General, said:
“The opening of the Job Retention scheme is an important milestone for businesses, who can now begin to access the cash they need to pay their staff and protect livelihoods.”
“The government deserves credit for the speed, scale and flexibility of its response to the challenges facing our business communities. The focus should now be on delivering this support to firms on the ground.”
However, the Chancellor would not comment on the expected cost of the scheme. When asked, he said: “We don’t have an estimate of take up yet - it’s just the first day the scheme is open and I expect those numbers to continue to increase over the coming days.”
As many as 8 million workers could be furloughed in total, according to estimates from the Resolution Foundation, which warned low-paid hospitality and retail companies would be affected most. It said the cost of the scheme after the first day alone would be £4.2bn over three months, although that figure is expected to rise sharply.
According to the Government, to be eligible for the subsidy, when on furlough, an employee can not undertake work for or on behalf of the organisation. This includes providing services or generating revenue.
Sacha Bright, CEO of NextFin, has responded: “Why doesn’t the government look at this situation creatively through the eyes of an entrepreneur and look at this time as an investment?”
“Most business owners will say: it is not the fact that there is no work to do as a result of coronavirus. It's the fact that they don’t have any revenue with which to pay staff. Many of these businesses despite furlough will not survive the crisis.”
“However, they may stand a better chance of surviving if staff were allowed to work. While of course, social distancing is a must, most business owners are creative and can instruct their staff to work from home on various projects. In the same way teachers are now educating students from home.”
“It’s clear that while this package is intended to help businesses, the bureaucratic urge to prevent fraud is removing a perfect opportunity for businesses to prepare themselves for reopening post-Covid-19.”
“In a time of national crisis, which threatens the economic future of not only businesses but the country, the Government needs to shift the focus away from politicking, to swift action to support enterprises at risk.”
Disclaimer
To the best of our knowledge, the information we have provided is correct at the time of publishing. Sacha Bright is not a solicitor or accountant and we recommend that you seek professional advice on any topic discussed.
Tagged: News
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