The companies furloughing staff

[The80sweregreat]

.. such as Victoria Beckham, Stella McCartney, Virgin etc.
It would be hard for me to boycott these companies as I haven't the money to buy their goods and services myself , but do mumsnetters think they are wrong to ask for tax payers money when they are wealthy themselves? Other companies are also taking money , but not getting the grief.
I'm glad these staff are keeping their jobs but do you think it should be owners paying the wages?
Not a journalist and I've little knowledge of business taxes and rates. Just curious of people's views on this latest problem thrown up by the coronavirus health emergency.
Are they being ' picked on' because they are famous? Is it fair?

its a business same as any other

For me I think the issue is that the idea of furlough is to prevent companies making people redundant. So if furlough wasn’t an option would there be redundancies, or would they be subbing with their own fortunes to keep things afloat. I guess we’ll never know really, and they’re just as entitled to use the scheme as other companies.

I think the general feeling is they should pay their staff themselves. I can see why they have asked the government for help , but it obviously upsets people to think they are and expecting the taxpayer to bail them out.
No easy answers here. I'm sure their staff are pleased to have wages and keep their jobs ( of course) but maybe the furlough scheme should be means tested? The owners should pay something as well?

Means tested? Based on profits? Turnover? Cash reserves? Net balance sheet? Relative to staff costs or just arbitrary limits?

At what point in time?

Businesses would go under before you could get something that complicated in place.

I think it would be unusual for a business to be able to afford to pay people to do nothing without any income or with significantly reduced income.

Plus limited companies are a legally separate entity to the people who own the company so it's not legally relevant how wealthy the owners are individually if the company itself can't afford to retain and pay staff. Bearing in mind most companies have other creditors too that have to be paid.

I think certainly in the case of Virgin they absolutely should be able to get government money. They’re a huge company yes, but that means a lot of staff and a lot of outgoings. Literally all their income is gone. Every industry they work in is closed and they’re among the hardest hit and will be among the last to open.
I don’t know why everyone is so focused on Richard Branson, I don’t think he’s the majority shareholder in any of these businesses anymore. In addition he has already put his own money in.
We travel with virgin a lot and I would be gutted to see them go under. And who does that leave? Pretty much just BA?

I think yes, they should but they wouldn't so so the staff would be without an income. The payments support the staff not the companies

I knew you would be the voice of reason about this! Trouble is , people see a headline ' millionaire owners get government help' and don't then get the whole story!
My own knowledge of these big companies is woeful. I know I should educate myself more!

Personally for PR if nothing else it would be good for 'celebs' to be putting some of their own cash into their businesses rather than relying on the tax payers to do so.

Schools like Westminster were going to furlough staff but as they have decent cash reserves they decided to use them. I think that is the wisest option.

I work for one of the larger corporate vet chains and I'm furloughed. They originally had us on reduced hours with full pay but it wasn't sustainable. Thank God for the furlough else i think I'd have been out of a job.

I'm so pleased the staff are benefitting from this. The backlash is going to be the owners who are seen as greedy and money grabbing from people who are not aware how businesses work ( such as me) !
I hope the businesses don't suffer too much as people need jobs. It's a tricky situation.

A lot of the owners are greedy though. There is a difference between doing what you can get away with legally and doing the right thing.

I'm not here to defend any of them as I don't know enough about it , but I do often come to mumsnet for rational thought processes rather than on line news which tends to go for the ' whip the country into a frenzy ' type of journalism ( such as about this latest furlough scheme which does seem pretty fair for a lot of people and will keep people in jobs I hope)

Umm, apart from it has been massively over subscribed and many people have had to sign contracts saying if the govt don't pay it then they will have to pay it back.

I think a lot of companies are using it when they should be using their own reserves/profits to fund staff during this time.

Honestly, the impact this is going to have on the tax payer going forward is insane. Will make the austerity years seem like the good old days.

And I know there isn't much of an alternative but I would prefer any profitable businesses to be actually looking after their staff rather than relying on the tax payer to do so.

Furlough and lock down have been a massive mistake and I hope those of us who have had no benefit from it all do not have to pay a single extra penny of tax next year to make up for it. Furlough will be riven with fraud.

I think so Xenia, so many posts on here of people who have been furloughed but still being expected to work.

@Paintforkitchen there are vast numbers of airlines other than BA and Virgin!

I agree the whole scheme is ripe for fraud. My brother’s company has “furloughed” him, but he’s still working for them full time. How many others are doing the same?

@GCacademic HMRC have asked that employers who do this are reported. HMRC do intend to perform audits, but it is very open to fraud.

My husband owns a small hospitality business, without the furlough scheme they would have become insolvent this month or next.

My employer is much larger, but some staff cannot work from home. I can, but have been asked to take a 20% pay cut, agree to 20% fewer hours, but today I worked a third over my contracted hours an£ have not completed everything I needed to, and 10 minutes ago received a request for additional information to support a report submitted today. .

So 10 hours wasn’t enough.

How could any potential fraud be policed though? I m not remotely surprised that some companies are 'playing the system ' but it must also be a nightmare to discover who is doing it properly and who isn't. The government do not have the staff to investigate every claim made. Unless people are willing to report these companies then a lot of money will end up in the wrong hands.

I also know someone who was told to work from home then furloughed once the breadth of the scheme was announced but told to keep working.

I suspect a lot of the people cheating the system, or trying to, will get caught out eventually.

I think employees who've been Furloughed but told to keep working won't report as it could cost them their job but I think the employers should face criminal penalties.

My issue with Virgin Atlantic and Victoria Beckham employees being Furloughed is that those businesses have been on the brink of collapse for quite some time David Beckham's money has funded his wife's business a few times and Virgin Atlantic were in financial crisis BEFORE the lockdowns. They had no contingency funds to survive a blip be it ash cloud, Coronavirus or any other blip to holidays..
BA has fallen out with it's staff big time but at least has enough reserves to go for 3 months or possibly more with pay cuts for some and off work furlough for others.
Top Shop staff deserved the protection of furlough but Philip Green and his wife don't deserve the off shore protection of their taxable income.
I think it would be sad if Virgin gets bailed out but Flybe were left to sink days away from protection for its staff
I do feel for the staff though and really wouldn't wish it on them so I'm in a muddle about what I think

@The80sweregreat HMRC detect fraud in various ways normally and I imagine their COVID fraud team (which has been already set up) will work as follows:

• They have algorithms which run on tax returns/page/vat etc. So it will flag up businesses you wouldn’t expect staff to be furloughed in (as industry). Vat returns are very quarter so will be useful. Firms will then be asked to provide information. If that doesn’t assist they will audit
• Random audits - it tends to be industries in a certain area
• employees reporting employers (more likely friends of those employees reporting them to hmrc).

Yes they won’t detect everyone, but that’s the same in every system. People defraud hmrc all the time.

They will come down like a tonne of bricks on firms found to be abusing the job retention scheme.

Strawberry, thank you ! I hope the HMRC managed to clamp down on any fraud.
I guess some people will '
Get away with it' though as the devil always looks after their own! Let's hope it's not too many abusing the system.

My medium sized employer has said they are deciding whether it’s appropriate to access the scheme. This shows they are considering whether they can take the financial burden.