We have compiled a list of the latest information to aid employers and businesses in their decision making.
The latest information provided in this document is dated from Monday 23 March to Thursday 26 March inclusive. If you require the previous information dated from Tuesday 17 March to Friday 20 March, it can be found on our website under news articles.
MONDAY 23 MARCH 2020
- In Friday’s announcement the Government revealed that they would support businesses through the Coronavirus Job Retention Scheme. All UK employers will be able to access support to continue paying part of their employees’ salary for those employees that would otherwise have been laid off during this crisis. ALTHOUGH THE GOVERNMENT HAS RELEASED A SUMMARY OF THE FURLOUGH SCHEME, THE DETAILS OF HOW THE SCHEME WORKS HAS NOT BEEN RELEASED. WE WILL UPDATE YOU AS SOON AS WE HAVE FURTHER DETAILS. The summary of the scheme is:
HMRC will reimburse 80% of furloughed workers wage cost, up to a cap of £2,500 per month. The grants can be backdated to 1 March 2020 and will initially be available for the first 3 months with a view to extend the scheme if necessary.
As an employer, you will need to identify the affected employees as ‘furloughed workers’. The employees will need to be notified by the employer of this change. We recommend that this is done in writing. Depending on the employee’s contract, paying anything less than 100% of the employee’s wages may have to be subject to negotiation. Please call us with any queries on employment contracts and amounts of pay if you think furlough is an option you may want to take.
The notified employee will then go onto furlough. The employer will continue to pay the employee’s salary (or a percentage if the contract allows or is negotiated) and the employer can recover 80% of the employee’s salary from HMRC. Whilst the employee is “on furlough” they cannot do any work for their employer in the time that they are a ‘furlough worker’.
At the time of this email, the method of how to apply and submit this reimbursement to HMRC had not yet been released.
Furlough may not be the best option in all cases. Alternative methods of reducing payroll should also be considered. Our Guide on Alternatives to Redundancy which was sent out last week sets out these alternatives.
We have produced a draft letter to be sent to furloughed employees. If you would like a copy of the draft letter, please let us know and we will send one to you. - The Government will bring forward legislation to allow small and medium sized businesses and employers to reclaim SSP paid for sickness absence due to covid-19.
The refund will cover up to 2 weeks SSP per eligible employee who has been off work because of Covid-19.
This will apply to businesses with less than 250 employees as of 28 February 2020.
As best practice, you should keep a record of all staff absences and payments of SSP. Employees will not need to provide a fit note in order for you to reclaim the costs.
At the time of this email, the Government had not yet released how the repayment of SSP mechanism may work. - The Government is supporting businesses by deferring Valued Added Tax (VAT) payments for 3 months. The deferral will apply from 20 March 2020 until 30 June 2020. Businesses will not need to make a tax payment during this period.
For the self-employed, income tax payments due on 31 July 2020 under the Self-Assessment system will be deferred until 31 January 2021. - For the 2020/2021 tax year in England, the Government has introduced a business rates holiday for retail, hospitality and leisure businesses.
Businesses that received the retail discount in 2019 to 2020 tax year will be rebilled by their local authority as soon as is possible.
The properties that will benefit from this are predominantly being used as;- Shops, restaurants, cafes, drinking establishments, cinemas, live music venues;
- For assembly and leisure; and
- As hotels, guests and boarding premises and self-catering establishments.
Please follow this link to help you calculate the business rate that you will no longer have to pay this year, if you fall into one of the above categories. - The Government has launched a new and temporary Coronavirus Business Interruption Loan Scheme which will be delivered by the British Business Bank. It will launch early next week to support primarily small and medium-sized businesses to access bank lending and overdrafts.
The Government will provide lenders with a guarantee of 80% on each loan, subject to a per-lender cap on claims. The Government will not charge businesses or banks for this guarantee, the scheme will support loans of up to £5 million in value.
The eligibility criteria is outlined below;- Your business is UK based;
- Turnover of no more than £45 million per year; and
- Your business meets the other British Business Bank eligibility criteria.
The new Coronavirus Business Interruption Loan Scheme supports SMEs with access to working capital (including loans, overdrafts, invoice finance and asset finance) of up to £5 million in value and for up to 6 years.
The Government will pay to cover the first 12 months of interest payments and any lender-levied fees, smaller businesses will not face any upfront costs and will benefit from lower initial repayments.
As best practice you should talk to your bank or finance provider as soon as possible to discuss your business plan with them. If you have an existing loan with monthly repayments, you may wish to ask the bank for a repayment holiday to help with cash flow.
Please follow;this link for the full rules of the Scheme and a list of accredited lenders. - There has been the Retail and Hospitality grant released which provides businesses in the retail, hospitality and leisure sectors with a cash grant of up to £25,000 per property.
For businesses within these sectors with a rateable value of under £15,000, they will receive a grant of £10,000.
For businesses in these sectors with a rateable value of between £15,001 and £51,000 they will receive a grant of £25,000.
You will not have to do anything to receive these grants, your local authority will write to you if you are eligible. - Businesses and self-employed people in financial distress, and with outstanding tax liabilities, may be eligible to receive support with their tax affairs through HMRC’s Time To Pay service.
They will be agreed on a case-by-case basis and will be tailored to each individual circumstances and liabilities.
If you have already missed a tax payment or feel you might miss your next one due to Covid-19, the HMRC have set-up a helpline just for this service. Please see the telephone number below..
0800 0159 559
TUESDAY 24 MARCH 2020
- On 23 March 2020, the Government stepped up measures to prevent the spread of coronavirus and declared that all non-essential premises must now close. Takeaway and delivery services may remain open and operational in line with guidance on 20 March. Online retail is still open and encouraged and postal and delivery services will run as normal.
The retail and public premises which we expect to remain open must follow the following stringent guidelines;- Ensure a distance of two metres between customers and shop assistants;
- Let people enter the shop only in small groups, to ensure that spaces are not crowded; and
- Put queue control measures in place where it is required outside of shops and other essential premises that remain open.
Please follow this link for a full and detailed list of further businesses and premises to close under Government guidelines.
There is considerable confusion in some sectors especially in construction and holiday parks. Businesses are trying to follow the guidance but are finding it difficult to do so. If you are struggling with the guidance, please let us know. - In response to the Covid-19, the Government announced there would be support for small businesses, and businesses in the retail, hospitality and leisure sectors.
The support will be in the form of two grant funding schemes, Small Business Grant Fund and the Retail, Hospitality and Leisure Grant Fund.
Local authorities will be responsible for delivering the funding to eligible businesses and the Government will reimburse Local Authorities that pay grants to eligible businesses.
The Local Authorities will be responsible for making payments to businesses.
Please follow this link which sets out the eligibility criteria for each grant and provides more details on how much funding will be received by eligible businesses in the sectors.
WEDNESDAY 25 MARCH 2020
- Most commercial insurance policies are unlikely to cover pandemics or unspecified notable diseases, such as Covid-19.
If your policy covers Government ordered closure and pandemics or Government ordered closure and unspecified notifiable diseases, you should be able to make a claim. (please check the terms and conditions of your policy carefully).
There are substantial differences in insurance policies, so you should check the terms and conditions of your specific policy and then contact your provider.
On 5 March 2020, the Government added Covid-19 to its list of notifiable diseases. Notifiable diseases are certain infectious diseases that registered medical practitioners have a statutory duty to inform the proper officer.
Many insurers use the diseases on this list as prompts for the activation or exclusion of insurance cover.
You may have purchased a specific add-on for your insurance cover which cover unspecified notifiable diseases. These policies effectively cover any disease listed as a notifiable disease, enabling the business to claim for losses on all notifiable diseases as well as from diseases that are unknown at the point the policy is written.
With the Government adding Covid-19 to the list of notifiable diseases, this ensures that businesses with unspecified notifiable disease cover are able to make a claim- this would be subject to the terms and conditions of your policy. - There remains some confusion as to whether construction sites should remain operational or not due to the additional measures outlined by the Government aimed at controlling the spread of coronavirus.
The Government has tried to provide some clarification and said that sites can remain open provided they can comply with the social distancing and health safety rules. Whilst clarification is sought a new code of practice has been produced by Build UK and the Construction Leadership Council (CLC), for sites that have remained open and it is recommended that it is implemented on each site that is remaining operational. Please follow this link for further details.
The guidance highlights that the health and safety requirements on any construction site must not be compromised and if any activity cannot be undertaken safely due to the lack of qualified personnel or social distancing being implemented, then it should not take place. If a site is not consistently implementing the measures set out in the guidance, then it may be required to shut down. - The guidance surrounding holiday parks and other suppliers of accommodation has been updated today. Please follow this link for further details
Where the guidance says:
“Hotels and other accommodation providers should be able to remain open if:- They are part of the response to support key workers or vulnerable groups.
a Local Authority has confirmed this means in relation to holiday parks “critical workers using their static as a commuting point, or there are EXTREME reasons why they cannot return to their primary residential address. The Local Authority has further added, “please remember this must be extreme circumstances only, we are all working together to protect the public, and the reason must be genuine and honest otherwise people are being put under unnecessary risk”. - There has been a proposed amendment to the Coronavirus Bill released, in which it would require the Government to introduce statutory self-employment pay for the self-employed and freelancers. The amendment proposes that individuals who are self-employed or freelancers would receive a ‘top-up’ to ensure that their net monthly earnings do not fall below the lower of:
- 80% of their monthly net earnings, averaged over the last 3 years
- £2917 per month
IT IS NOT YET CLEAR IF THIS AMENDMENT WILL BE ACCEPTED, WE WILL UPDATE YOU AS FURTHER DETAILS ARE RELEASED.
THURSDAY 26 MARCH 2020
- The Town and Country Planning Order inserts a new permitted development right into the Town and Country Planning Order 2015, allowing for a change of use to the provision of takeaway food from restaurants and cafes and a mixed use of any purpose (drinking establishments with enhanced food provision). This is for a time limited period (temporary) change of use of provision for the period starting from 10:00am on 24 March ending on 23 March 2021.
- It has come to our attention that in the coming days, North Yorkshire Police have indicated they will be establishing road checkpoints in the county, to ascertain if individuals are taking essential journeys or not. We are not aware of Humberside Police indicating they will be taking such action. However, in response to this and some clients asking for letters for their employees, we have drafted a letter of compliance for your employees to carry with them, which explains that their journey is both essential and legitimate.
If you would like a copy of this letter to distribute to your employees, please let us know and we will amend it accordingly for the sector in which you work and the reason for their travel.
Given that the Governmental advice and guidance is changing day by day, in tomorrow’s update we will provide a summary of employment law and pay related matters that we have covered so far, to try and aid in the simplification of the information received and give a breakdown of the broad scenarios that we have come across with our clients.
We currently work with ex-bank manager David Catley, who is on hand to assist with assessing your financial needs, reviewing existing banking facilities and accessing Government loan schemes. He is currently helping us support clients with the financial and business impact of Covid-19.
If his knowledge and expertise would be of value to you, or you would like to call for a chat and some guidance then please contact David Catley on 01482 324591
This advice based upon the Governmental and ACAS guidance as at the time of this email.
