We will certainly all look back in years to come and remember the year 2020! The year in which our worlds were spun upside down and the word ‘unprecedented’ got flung around more than roger Federer’s tennis racket.
For me as a business owner these past few weeks have certainly been a rollercoaster ride, with 6 staff on payroll and myself to look after it’s all been a bit hectic.
So today I thought I would touch on the subject of ‘Furlough’ – a term used during this situation for staff that have been temporarily laid off.
So is furlough a relief or a concern?… I think this depends on which side of the fence you are on, whether you are being furloughed or you are the business owner, so let’s chat….
What does furlough mean for me?
I’m certain that most of you are already aware of what furlough is (its being paid to be at home – winner) but is it truly as amazing as it sounds? Well for most people I would say unfortunately not, unless you work for a large corporation then chances are that you will only be getting paid 80% of your wages (well better than nothing right…?) Wrong.
That 20% will have a huge impact on most people, we all know exactly how much money we have coming in each month and we live according to that wage. Not everyone is lucky enough to be able to save any of their wages because their wages only just cover their outgoings with maybe only enough left over for that bottle of Rose at a weekend. Pfft furlough!
Why shouldn’t I get 100%?
For a lot of businesses, they simply cannot afford to pay their staff to be at home when they aren’t at work generating any money for the business. Thankfully the government will recuperate businesses’ the 80% paid to staff during the covid pandemic and the other 20% is to be paid at the employers discretion.
How am I meant to live?
Most companies are offering payment breaks or holidays during these times, which may help now but potentially not in the future. The drop in payments you make to someone for your bills needs to be paid back somewhere and some way. You can, depending on your circumstances apply for universal credit which may help when your struggling to stay afloat.
Unfortunately for some people furlough hasn’t been an option if they have been recently made redundant and there is a lot of people much worse off than those that are still getting some percentage of their pay.
So, what does furlough mean as an employer?
As a company director I’m required each month to pay the staff for the work they do, on time and correctly. But wait, they aren’t working, I don’t have any business and the pot isn’t never ending so how am I meant to pay them?
Those who have never had their own business may be lead to believe than business owners are rolling in it (trust me we aren’t) and some businesses only have a small margin of profit each month to work with thankfully as of the 20th April businesses are able to claim back the 80% pay they need to pay staffs wages, meaning that us business owners don’t have to either use the savings in the business or take out a loan to get us through.
Who pays me?
A lot of business owners aren’t on their own payroll, because they don’t pay themselves a set wage (they take what they can when they can) amongst many other reasons. So how do we get paid? The simple answer is we don’t yet, according to government guidance (at the time of this blog post) self employed won’t be get anything back until June time…a whole 3 months after lockdown.
Thankfully we can claim an 80% taxable grant against trading profits going back the last 3 years. Amazing I hear you say, well for a lot of businesses profits aren’t a thing of luxury, as what comes out of the business usually gets reinvested back into it to help it grow.
So, anyone who doesn’t have accounts going that far back or who earns high profits aren’t eligible. Luckily for those businesses with premises that get small business rates relief they are being granted £10,000 to help keep the business afloat during lockdown.
When you own a business you take on the role and responsibilities of finances and difficult times but these circumstances have hit a lot of us like a tonne of bricks and unfortunately some businesses wont come out the other end and will fall victim to Covid19.
As with all things there are loopholes and gaps that people fall through and covid is no different, there are a huge number of people and businesses that won’t get any help at all during these ‘unprecedented’ times.
So going back to the question of ‘is furlough a relief’ I would say nothing feels that way at the moment, we have to remain positive and thankful that we have all the things in life we do to be grateful for, somewhat more than most See this as an opportunity to do all the things we say we never get time for, build on that business behind the scenes so you can come out of this bigger and better than ever. Come out of isolation a sensation!
We are all in this together!
Thanks for reading Hun,
Stay safe babes,
Lauren Lily Lea xxx