Over 70% of businesses have furloughed staff as they wait for cash to help save jobs
MORE than 70 per cent of UK firms have furloughed staff while they wait for cash to help save jobs.
The coronavirus job retention scheme, which launched on Monday, was flooded by applications from 140,000 firms in the first 10 hours.
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Under the scheme, firms can apply for the government to cover 80 per cent of the wages of furloughed workers, up to a maximum of £2,500 per month.
According to the latest study by the British Chambers of Commerce (BCC), 71 per cent of firms have now furloughed a proportion of their staff - up from 66 per cent last week.
Meanwhile, 30 per cent of firms said they have furloughed between 75 and 100 per cent of their workforce.
The study was based on 678 responses from UK businesses, of which 98 per cent have fewer than 250 employees.
How does the furlough scheme work?
ANY UK organisation with employees can apply, including businesses, charities, recruitment agencies and public authorities.
It's up to your place of work to apply to the scheme, meaning you won't need to contact the government yourself.
To access the scheme, your employer must comply with the following:
- Designate employees who cannot do their jobs due to the coronavirus measures put in place by the government
- Notify those employees of their new "furloughed" status
- Submit information to HMRC about furloughed employees to set up a system for reimbursement and about existing systems that will facilitate payments
To be furloughed, you must have been on a payroll on March 19.
Furlough leave can be backdated to March 1, but the portal your employer will use to register your furloughed status only launched yesterday.
Consequently, you will not be paid until the end of this month.
Workers can ask previous employers to rehire and furlough them, even if they left for another job, but firms don't have to do this.
With April's payday fast approaching for many firms, the BCC is warning that there's only a short time to get the cash to firms facing financial difficulties.
It's also urging the government to consider keeping the scheme in place for longer to help businesses through the transition period when lockdown ends.
Last week, Chancellor Rishi Sunak extended the scheme for another month over fears that thousands of workers would get made redundant.
BCC director general Adam Marshall said: "This is a crunch week for businesses relying on the job retention scheme to pay their staff."
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He added: "Our research suggests that over 70 percent of businesses will be using the furlough scheme in some form, so it’s absolutely crucial that it delivers.
"HMRC’s capacity to deal with the demand from business has been encouraging so far – and their staff working under immense pressure to get it up and running deserve our recognition and thanks.
"It is now critical that payments from the furlough scheme reach businesses as smoothly and as quickly as possible in order to protect jobs and livelihoods.
"Ministers will also need to consider keeping the scheme in place for longer, to help businesses transition as the lockdown is eased and the economy moves gradually toward a new normal."
A Treasury spokesperson said: "We’ve taken action at unprecedented speed to help businesses, jobs and our economy during this crisis – with hundreds of thousands of firms across the county benefitting from our wide package of support.
"We launched the coronavirus job retention scheme on Monday morning and by midnight 185,000 firms had submitted claims worth £1.5billion for 1.3million employees.";
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The coronavirus has forced 11million people to be furloughed or made unemployed – nearly a third of Britain’s workers.
Meanwhile, experts have predicted that GDP will fall 35 per cent.
Read our need-to-know guide to how furlough works.
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