Jersey businesses hit back at Covid payroll co-funding repayments

• Report by ITV Channel's Richard Pallot

Businesses in Jersey are warning their futures could be at risk after being asked to pay back thousands of pounds to the government through the Co-Funded Payroll scheme.

The scheme saw £140 million paid out to help businesses get through the pandemic. Now the government says there are businesses that have been overpaid and want around 10% of this money back.

The St Malo Bistro is facing repayments of more than £20,000. Director Jonathan Rubber says his businesses situation is now "very precarious". The money covered ten months pay for a head chef.

After several left the business during the pandemic, his wife Helen had to fill the role. Jonathan says officials assured him repeatedly he could claim, but not now, as she was already part of the family business.

"We've just been through a two year nightmare, just coming out the end of it with our reserves depleted because of it and now we've found ourselves with demands from the government we can't possibly meet."

Musical instrument repairer Laura Poingdestre also says there was confusion surrounding the application. Laura lost 80-100% of her earnings during the pandemic. She believed this was an alternative to a loan and says she used the funds solely to cover her overheads for the business she's been building for 14 years.

She said, "They're now saying to me that that's not what the scheme was for at all, it was in the title that it was payroll and it should have just been my business net profits that I was applying with, not my gross monthly earnings and that would have been paying myself my wage, which is, as a sole trader, your profits and not your gross monthly earnings.

"It was very contradictory and quite confusing and I think it's shown how much it's been of a miscommunication because it's not just me."

Laura is now being asked for more than £8,000 back and says the stress has caused her to go back to work early from maternity leave.

"I think personally you feel like you’ve been attacked a bit. Or like I feel like I’ve done something wrong, or I’ve asked for it in the wrong way, or I’ve been taking the Micky by asking for money that isn’t being applied in the right way, when I thought I was being genuine and doing it all in good faith."

Initially, businesses were sent letters demanding the repayment be made in 14 days.

Now the government says companies have two years to pay back the money, which can be done in installments. In certain cases, this window could be extended to five years.

Earlier this year, The Corporate Services Scrutiny Panel published a report saying that claimants under the scheme had been "made to feel like criminals", recommending a number of changes including a right for businesses to appeal.

They were rejected by the island's Treasury Minister, Deputy Susie Pinel, who said there were no errors in the scheme.

"Many of these people have claimed for their business income rather than their personal income, and therefore, received a subsidy that was often higher than the amount of money they usually make from their business in normal economic conditions. Others have included income that is not related to the self-employment that the Scheme was there to protect such as rental income, investment income, or their income from an unrelated job.

"These other sources of income were not eligible for support and were often unaffected by the pandemic. When taking account of the CFPS subsidy, claimants would have received a high level of income than they did before the pandemic."

"While the overwhelming majority of overclaims are likely the result of honest mistakes, it is absolutely not the case that these issues are the result of Government incorrectly interpreting the rules of the Scheme or making decisions that lacked reasoning."

Ian Burns, Director General of Customer and Local Services, says if people affected should contact them.

"If people are worried they should get in touch with us, set up an installment agreement and make sure that they can afford to pay it back over that period."