New Edinburgh bistro owner still waiting on furlough payment says she's now £20k in debt and has been forced to ask staff to apply for Universal Credit

Jo Hamilton, who runs Spoon in Nicolson Street with Alice Cameron, says she is "frustrated and demoralised" by the lack of communication from HMRC about paying her 15 staff 80 percent of their wage for the past two months of lockdown.

The 27-year-old, who took over the business in January and reopened it in February, said all relevant documents were sent off to HMRC to register payroll information at the end of February in line with their guidelines. But a PAYE reference number needed from the government department was not received until April 3rd, two weeks after the March 19th deadline to register, meaning she has been left in the unfortunate situation of being unable to claim wages for her employees through the coronavirus job retention scheme.

Jo says her bookkeeper has contacted HMRC numerous times to try and find a solution but has been fobbed off to the point it’s now being handled by their complaints department.

The hope is that HMRC might find a way to set up another online mechanism for new businesses who have found themselves, at no fault of their own, in a position where they have no money to pay their staff wages.

Jo, who has been paying her staff with business reserves, said: "The issue now is that we are expecting this money but have ended up draining our bank account while we were on a strong financial path, and have gone into overdraft.

"It's a shame for our staff. We have spent at least £20,000 and have got a £5,000 overdraft and are getting approved for a loan, but I'm hesitant about spending that money at the moment as it's now also about whether we actually continue.

"I want to stay optimistic but also realistic that we might get to the point where we might want to cut our losses because we don't know what the next year is going to be like."

Jo says they have been using reserves from the first two months of business to pay their staff the equivalent 80 per cent wage, but she can no longer afford to pay this and has urged some of her employees to apply for Universal Credit.

The lack of eligibility for a government grant, given they are a new business without sufficient evidence of cash flow, has exacerbated the situation and they still need to keep paying rent.

Despite these ongoing difficulties, Jo and Alice will be selling coffees and teas, soft drinks and cake from tomorrow and by next weekend, her two chefs will be cooking up breakfasts, lunches and dinners for pre-ordered collection.

An HMRC spokesperson said: “Our guidance is clear on the requirements for the scheme, which include notifying HMRC on an RTI (real time information) submission on or before 19 March 2020. This must relate to a payment of earnings in the 19/20 tax year.

“But if an employer believes there have been mistakes or unreasonable delays with their application caused by HMRC they should follow our complaints process which can be found on the gov.uk website."

Has your business been affected in the same way as Jo’s? If so, feel free to contact [email protected]