THE UK Government is being urged to clarify if firms unable to pay staff as a result of the coronavirus crisis will still be eligible for the furlough scheme.

The Coronavirus Job Retention Scheme (CJRS) was unveiled last month as a key part of measures to protect jobs during the pandemic.

Under the initiative, which opens for applications tomorrow, the Government has pledged to cover 80% of workers’ wages if they are put on leave.

But SNP MP Anne McLaughlin has raised concerns over whether firms who have been unable to pay staff in advance will still be covered by the scheme – as guidelines from HMRC say the money will be reimbursed.

She said she fears lots of small businesses are assuming they will be eligible, but she has been unable to get confirmation from ministers if this will be the case, despite raising the question three weeks ago.

“My biggest fear is there is a whole load of companies who have told their staff that sorry we can’t pay you just now, you are furloughed,” she said. “I have had people saying to me they have just assumed it would be alright.”

McLaughlin, MP for Glasgow North East, said the issue was brought to her attention while she tried to help local firm City Blinds and Shutters, which stopped trading as a result of the coronavirus social distancing restrictions.

After being turned down for a Business Interruption Loan, the firm’s owners considered using the furlough scheme to try to keep the company viable.

However they were concerned it would not be eligible due to the issue of being unable to pay wages in advance – and did not want to mislead workers that their salaries would be paid at the end of April when they could have been applying to claim benefits instead.

McLaughlin said in a bid to help she had begun trying at the end of March to get answers as to whether a company can furlough its staff even if it cannot pay wages.

But unable to get any confirmation, the firm decided it had no option but to go into administration, with the loss of 63 jobs.

“We had a few days to save them and the way to save them was to get the answer to that question,” McLaughlin said.

“The Parliamentary Private Secretary for the minister responsible was saying don’t worry, the minister knows it is urgent, and they know the decision [on administration] is being made tomorrow, they will get back to you.

“That was weeks ago and I still haven’t heard back.”

She added: “I can’t have multiple situations like the one where this company went bust and 63 people lost their jobs. We need an answer and if an answer is you must pay wages in advance then that gives time to push to change that.”

McLaughlin added she had even tried to get clarification through HMRC customer support through Twitter, but a response said it was awaiting further guidance.

The Sunday National tried to contact the Treasury through email and phone messages but did not receive a response.

On Friday Chancellor Rishi Sunak said the furlough scheme would be available until the end of June, after warnings more jobs could be lost if it was not extended.

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