ICSM Credit: as firms shut down check to see if you can furlough staff and ruthlessly chase up all your debtors

ICSM Credit explains the system and stresses getting debtors to pay up now is vital for survival.

Companies have been laying off staff as the end of March arrives because they do not have the funds to pay them in May as business has disappeared.

Many firms are making the difficult choice to make their workers redundant or to take up the Government’s furlough scheme if they are eligible.

Ian Carrotte of ICSM Credit said the end of the month being March was also the end of the financial year for many companies and difficult decisions were being made in boardrooms and accounts departments across the country.

“The first thing employers and employees should do is to see if they can apply to be ‘on furlough,’” he said, “If you both agree, your employer might be able to keep you on the payroll on 80% of your salary if they have no work for you because of coronavirus. Staff will be paid as normal by their employer less tax although there is a gap as the Government said the scheme may not be up and running until the end of April although it can be backdated.”

The Government’s guidelines explain that any UK employer with a UK bank account will be able to claim, but you must have been on your employer’s PAYE payroll on 28 February 2020. You can be on any type of contract, including a zero-hour contract or a temporary contract they said.

Ian Carrotte said: “It does not apply if you are self-employed or to any income from self-employment. If you’re on sick leave or self-isolating because of coronavirus (COVID-19), speak to your employer about whether you’re eligible - you should get normal sick pay but can be furloughed after this.”

Some businesses have already made the decision to cut staff numbers in the belief that once the crisis is over and the furlough system ends on June 1 they won’t have much of a business left. For instance last Friday Electric scooter-maker Bird axed about 400 posts or around a third of the workforce while hospitality firm Sonder laid off 400 staff, as has Airbnb Zeus Living. Around 4,000 workers have been axed by North Sea Oil firms as part of their concerns over the parallel collapse in oil prices due to the massive drop in demand.

Where ever you look at the moment staff are being laid off from Gatwick Airport to retailers, pubs, clubs and restaurants with hundreds of thousands of workers facing a bleak couple of months unless their employer can get on the furlough scheme. For many small and medium sized firms, many being family businesses with only one of two employees things are very difficult.

Ian Carrotte of ICSM Credit said many companies have a long list of debtors and if there is little work in April then it is essential to ensure the money owed is recovered.

He said: “Do not delay in chasing overdue invoices as that cash could be you lifeline to survival assuming things get back to normal in June. ICSM credit members should use our free legal letters which are highly effective while if all else fails our debt collecting service has a very successful track record in getting settlements in full.”

ICSM Credit

For details about ICSM Credit call 0844 854 1850 or visit the website www.icsmcredit.com or email Ian at Ian.carrotte@icsmcredit.com on how to subscribe and to join the UK’s credit intelligence network to avoid bad debts and late payers. Follow ICSM Credit on FaceBook, Twitter and YouTube and Ian Carrotte on LinkedIn.

To keep up to date subscribe to the FREE ICSM Credit Newsletter to hear all the latest insolvency news and to see who has gone out of business click on the orange panel on the top left of the home page of the website www.icsmcredit.com or send an email to Ian.carrotte@icsmcredit.com

For details for the work of the journalist Harry Mottram visit www.harrymottram.co.uk