To ask why a company might use a private fund rather than furlough?

[Isitgiroday]

Posting for traffic! Not very exciting but wondered if anyone could answer this? Would there be any financial benefit (in the long run) for a company using a private "fund" to rather than the furlough scheme? Am I just a cynical cow thinking their must be some sort of benefit to them? (They're pretty much operating business as usual so I guess this is where they benefit this time round - they're only applying the "fund" to those with childcare issues and keeping going despite restrictions.)

Can't think why you would not furlough staff properly if appropriate.

However govt has plans to name companies who used furlough and maybe they don't want to be on the list

You can't furlough staff whose wages are paid with government funding. For example, a charity who gets a government grant can furlough those staff, so if they might choose to use other funds to give staff paid leave for childcare reasons.

‘Well off’ companies have been berated in the press for using furlough rather than their own funds. A golf club and a hotel spring to mind.

It’s a tricky one.

If you use the government furlough then pay massive bonuses to your directors in the same financial year, it’s not a good look.

Companies who have claimed will be published on a list and it could be seen as taking the so I assume for that reason

Companies may not want to be seen to be accessing government funds if they are otherwise prospering. It wouldn't look good to declare bumper profits which include any element of government funding. Even moreso if the company ever gets government contracts.

@topcat2014

Can't think why you would not furlough staff properly if appropriate.

However govt has plans to name companies who used furlough and maybe they don't want to be on the list

I'd like to check that list, could you tell me where you heard about that? I know individuals can check on thier own position but I hadn't heard there was going to be a public list

The only reason I can thinkof not to use furlough is that the employer doesn't fit the rules in some way

@AllThatFancyPaintsAsFair - HMRC announced in November they would be publishing a list in relation to JRS(2). I've not gone onto their website to look though

@AllThatFancyPaintsAsFair HMRC will be publsihing a list, apparently.... bimbles off to have a look.

I can't find the list published a while back but the Public Accounts Committee has requested an updated list by end of Jan so assuming that would be made public.

I work for a company listed on the stock exchange. We haven't furloughed anyone yet but from the start it was agreed that if the need arose it would be done from separate funds and not via the government scheme so as to avoid any negative publicity when it comes to critical periods such as the twice yearly share divs.

Ah ha! The published details will only relate to claims made relating to periods later than 1 December 2020.

and many bog firms have adjusted their CJRS by handing back a lot of cash

Several major retailers have returned business rates relief in recent weeks, including B&Q owner Kingfisher, which handed £130m back to the Treasury. Other big names include supermarkets Tesco, Morrisons, Sainsbury’s and Asda, along with Aldi, Lidl, B&M and Pets at Home, taking the total collected to more than £2bn.

If a company can afford to pay wages without furlough then they absolutely should! We are all going to be paying the price for this for a long time

If the company is planning on paying dividends to shareholders many of them are not keen to be on the list taking furlough grants.

The government has made it clear that public limited companies who have claimed furlough should not be issuing shareholder dividends. That is a pretty big motivator and why many companies paid back furlough.

Thank you @CuriousaboutSamphireand @SummerSazz I'll have a look

@Isitgiroday

Posting for traffic! Not very exciting but wondered if anyone could answer this? Would there be any financial benefit (in the long run) for a company using a private "fund" to rather than the furlough scheme? Am I just a cynical cow thinking their must be some sort of benefit to them? (They're pretty much operating business as usual so I guess this is where they benefit this time round - they're only applying the "fund" to those with childcare issues and keeping going despite restrictions.)

For big companies like hsbc it has a reputational benefit (their deposits increased after they were the only uk bank that refused the bailout). But I imagine their real reward is a seat at the table the next time the government is consulting re rate and other tax changes.

The company I work for isn’t using furlough. They’re very clear that as the government counts is as essential and we can almost all work from home it would be very bad form to use it. I agree but it’s hard on those whose schools are saying that because they’re home they can have small children home and homeschool them whilst working full hours whilst the company won’t budge on furlough.

Law firms faced bad press for using furlough, so some of them paid back the furlough money and self-funded instead. I imagine the same applies to some other industries.

Of course, thanks guys - makes sense. They do well and their business is relatively unaffected by Covid. It's a shame the mangers at local level have been somewhat reluctant to divulge the existence of said fund - poss comes out of their budgets in some way.

DHs company are using furlough. The parent company is not. That's because the owner of the parent company wants all of the workforce to have jobs when this is all over.

So DHs company, which just about breaks even but employs a lot of people who would find it difficult to get similar work round here, is claiming all it needs to stay afloat without drowning the parent company. It's legal and it makes sense to me. The owner isn't all that altruistic, but it would harm his reputation if the blue collar company he owns was the only one that went under!