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Covid-19 : Charities shouldn’t be put off from applying to furlough staff

Posted: 14th May 2020

Ben Doherty, Head of Lindsays Employment team, believes the dynamics of how the pandemic has played out means more third sector organisations than previously thought may be able to benefit from the Coronavirus Job Retention Scheme.

Charities are among the 800,000 employers who have used the scheme – where they can apply to HM Revenue and Customs for a grant of 80% of a furloughed employee’s monthly salary, capped at £2,500 – as an alternative to lay-off or losing their job as their income has collapsed because of crisis and the lockdown it has caused.

Although Chancellor Rishi Sunak has said he intends phasing out the scheme as the UK economy recovers from Covid-19, it has now been extended until the end of October.

Guidelines state that organisations which receive public funding to support staffing costs cannot furlough staff, which impacts upon many charities. However, it may be appropriate in some cases.

Ben said: “Third sector organisations which receive public money may, in certain circumstances, still be able to place staff on furlough. They should certainly not be put off making an application to HMRC.

“For example, charities have been left with no option but to close their fundraising shops. Why not furlough the people who worked there? The shops are bringing in no income. The same could apply to fundraising teams, where the events they would normally run can no longer be staged – and where there’s no prospect of them being held in the near future. All of their work has had to stop. If you don’t furlough them, you face having to make them redundant.

“Likewise in social care where bank workers are used, but where they are unable to do their work at the moment. There’s nothing to be lost in making an application. We’re hearing reports of trade unions being supportive of this and willing to work with employers on appeals if initial applications are rejected.”

“As guidance has been updated, it has become clear that the Coronavirus Job Retention Scheme has – in many ways – become an extension to the social security system. It’s about keeping money going into households.”

Charities which receive public money for staffing with employees who cannot work because they are shielding – or because they live with someone who is shielding – should also be entitled to be placed on furlough.

It has been revealed that one in five British workers has been furloughed, meaning the government is paying the wages of 6.3 million people. Downing Street says the initiative has cost £8 billion so far.

You can find further guidance regarding the Job Retention Scheme in Lindsays furlough scheme FAQs on the firm’s Covid-19 hub.

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Business Comment is the Edinburgh Chamber of Commerce’s bi-monthly magazine. It provides insight on Edinburgh’s vibrant business community, with features on the city’s key sectors, interviews with leading figures and news on new business developments in the capital.
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