Money is getting through

The distribution of grants to small businesses and the hospitality trade appears to be running very well.

Whilst we have had no feedback as yet from businesses in Mendip, the other Districts are clearly pulling their weight.

The feedback from businesses in Sedgemoor, SSDC and SW&T suggests the money is getting through to those who need it. And getting through rapidly. Typically 8-10 days between claim and receipt of funds.

The job retention scheme though is more up in the air. It is intended to pay 80% of salaries of staff on “furlough”. These are staff who remain employed, but are put on effectively unpaid leave.

It can be for any employees who were furloughed after the 1st March but is capped to £2,500 per employee.

You must also have had a PAYE scheme in place before 28th February to qualify.

So far so good. What will you need to claim? Claims can be made after an employer has run a payroll or in advance of an imminent payroll. The guidance lists the information employers will have to provide:
To claim, you will need:
• your ePAYE reference number
• the number of employees being furloughed
• the claim period (start and end date)
• amount claimed (per the minimum length of furloughing of
3 weeks)
• your bank account number and sort code
• your contact name
• your phone number

Originally we were told the scheme “is set to come into effect by the end of April”. Now many people assumed that would mean that HMRC would be ready to pay out by the end of April.

During Treasury Questions, the Chancellor went so far as to explain that claims will be paid in the April payroll.

However, latest guidance from HMRC is that setting up a system to apply for the support will not be in place until the end of April.

This is somewhat different. We must expect some turnaround time and some time for claims to be scrutinised.

District councils only have to deal with a District, HMRC has to handle the whole country. So is it realistic for business to expect they will be receiving money to pass on to their employees by 30th April?

We have numerous examples of what happens when Government launches a new online system that everyone wants to use. Not only use, but use immediately:

  • In 2016 the NHS sent a test email out to employees to test a new system and it crashed.
  • In 2019 the government petitions site crashed with lots of users logging on to sign a Brexit petition
  • and in the private sector Ocado had to shut down its website during the current crisis when overwhelmed by demand on 18 March

This may be an unduly pessimistic view of events. However many local businesses in Somerset are looking to use the scheme. They would do well to allow for some cashflow implications or to warn employees that realistically they will be paid late for April.

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