The main route for government support of SMEs, especially in sectors such as manufacturing where there is not industry-specific support, is through the British Business Bank, and particularly the new Coronavirus Business Interruption Loan Scheme This will help ensure that eligible businesses facing short-term cash flow difficulties can continue to access finance as they respond to the temporary impact of the coronavirus outbreak on cash flow.
By providing an 80% government guarantee on eligible lending, this scheme will give lenders the confidence to keep lending to businesses.
The Scheme will support loans of up to £5 million in value. Businesses can access the first 6 months of that finance interest free, as government will cover the first 6 months of interest payments.
The scheme is open to businesses with a turnover of less than £41m (as long as the business is long-term viable and is UK based) which meet the scheme’s eligibility criteria.
To maximise the support available, the Chancellor is extending the CBILS so that all viable small businesses affected by COVID-19, and not just those unable to secure regular commercial financing, will now be eligible should they need finance to keep operating during this difficult time. The government is also stopping lenders from requesting personal guarantees for loans under £250,000.
Loans of up to £25,000 to sole traders and unincorporated enterprises can fall within the scope of FCA regulation.
You should talk to your bank or finance provider (not the British Business Bank) as soon as possible and discuss your business plan with them. This will help your finance provider to act quickly once the scheme has launched. If you have an existing loan with monthly repayments you may want to ask for a repayment holiday to help with cash flow.
Large Business Interrruption Loan Scheme
Businesses will be able to benefit from larger loans under the Coronavirus Large Business Interruption Loan Scheme, the government has announced. The maximum loan size available under the scheme will be increased from £50 million to £200 million to help ensure those large firms which do not qualify for the Bank of England’s COVID Corporate Financing Facility have enough finance to meet cashflow needs during the outbreak.
Small Business /Rate Relief
The government has also provided additional funding for local authorities to support small businesses that already pay little or no business rates, the funding will provide a one off grant of £10,000 to businesses currently eligible for small business rate relief (SBBR) or rural rate relief.
Details and eligibility for the Small Business Grant Fund can be found here
If your business is eligible for SBRR or rural rate relief, you will be contacted by your Local Authority – you do not need to apply.
£20 million in new grants for small businesses
The government have announced £20 million new funding to help businesses across England get back on track after Covid-19. Small and medium sized businesses in England can access grants between £1,000 - £5,000 for new equipment and technology and specialist advice.
Financial Assistance Scheme for Statutory Redundancy Payments
A scheme has been set up to help employers who are unable to pay their employees statutory redundancy pay.
If you cannot afford to pay your employees redundancy pay you can apply to the Redundancy Payments Service (RPS) for financial assistance
You can find information about the scheme here
Job Retention Scheme
The government has also launched a Coronavirus Job Retention Scheme. Under this scheme 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. You can find out if you are eligible here
Employers can use a portal to claim for 80% of employees on a leave of absence’s usual monthly wage costs, up to £2,500 a month.
The scheme is open to all UK employers that had created and started a PAYE payroll scheme on 19 March 2020.
For salaried employees, the salary as at 19 March 2020 (instead of 28 February 2020) should now be used to calculate claims under the Scheme
Employees who have been inherited on a TUPE transfer after 19 March 2020 may be furloughed, and the employer can claim under the scheme in respect of these employees (even if the new employer did not operate payroll on 19 March 2020).
Squire Patton Boggs have published
this analysis of the scheme
The government have created a
useful factsheet on the CJRS which highlights key dates relating to the scheme. A
government factsheet looking at the scheme as a whole is also available.
The Government has published revised guidance on the
Coronavirus Job Retention Scheme, which provides further details of how the scheme will change in the coming weeks. A new system of flexible furlough will be introduced from 1 July 2020 and employers will be required to contribute to the CJRS wage subsidy from 1 August 2020.
Guidance on calculating how much you can claim using the Coronavirus Job Retention Scheme has been
updated with a new section on how to calculate your claim for fixed pay employees who have worked enough overtime (in the tax year 2019 to 2020) to have a significant impact on the amount you need to claim.
Bounce Back Loan Scheme
The government has announced a
Bounce Back Loans scheme, which will provide loans of up to £50,000, to help bolster the existing package of support available to the smallest businesses affected by the coronavirus pandemic.
Furloughed Workers
HMRC have announced that they will reimburse 80% of furloughed workers wage costs, up to a cap of £2,500 per month. HMRC are working urgently to set up a system for reimbursement.
The government has announced that the Coronavirus Job Retention Scheme will remain open until the end of October. New flexibility will be introduced to the Scheme and employers will be required to contribute to the wage subsidy from August 2020, with further details of these changes to be announced by the end of May.
HMRC have confirmed that employers need to claim by 31 July for employees furloughed through the Coronavirus Job Retention Scheme (CJRS) for periods ending on or before 30 June. Furthermore, employers will no longer be able to use a CJRS grant to cover National Insurance (NI) and pension contributions for furloughed employees from 1 August.
From 1 August 2020 until 31 October 2020, the Scheme will continue but with "more flexibility" including the ability to bring furloughed workers back part-time. Currently, workers can do no work for the employer while on furlough.
From 1 August 2020 until 31 October 2020, employers will be required to make a contribution to the wages that workers receive under the Scheme to ensure that, through the combined efforts of Government and employers, workers continue to receive at least 80% of their salary, up to £2,500 per month.
The government has
announced that from 1 July 2020, businesses will be given the flexibility to bring furloughed employees back to work part time. This is a month earlier than previously announced to help support people back to work. Individual firms will decide the hours and shift patterns their employees will work on their return, so that they can decide on the best approach for them - and will be responsible for paying their wages while in work.
BEIS have clarified the eligibility on furlough, noting that “claims from July onwards will be restricted to employers currently using the scheme and previously furloughed employee”. This means all employers who have previously furloughed staff. Employers will not be eligible from July if they have not previously furloughed their staff, but will be eligible if they have furloughed them previously at any point. The individuals do not have to be on furlough on 30 June / on the day of the announcement to be eligible to be furloughed from 1 July, as long as they have been furloughed previously. The latest date an employer can place their staff on furlough for the first time is 10 June.
As part of the Chancellor’s newly announced ‘Plan for Jobs’, a Job Retention Bonus will be introduced to help firms keep furloughed workers. UK Employers will receive a one-off bonus of £1,000 for each furloughed employee who is still employed as of 31 January 2021.
New law to ensure furloughed employees receive full redundancy payments
The government has introduced a new law to ensure furloughed employees receive statutory redundancy pay based on their normal wages, rather than a reduced furlough rate.
Short Term Debt
Under the new Covid-19 Corporate Financing Facility, the Bank of England will buy short term debt from larger companies. This will support your company if it has been affected by a short-term funding squeeze and allow you to finance your short-term liabilities.
It will also support corporate finance markets overall and ease the supply of credit to all firms.
The scheme is now available for applications.
Eviction Protection for Commercial Tenants
Commercial tenants who cannot pay their rent because of coronavirus will be protected from eviction, the government has announced.
These measures, included in the emergency Coronavirus Bill currently going through Parliament, will mean no business will be forced out of their premises if they miss a payment in the next three months.
Three-month extension period to file accounts
Businesses will be given an additional three months to file accounts with Companies House to help companies avoid penalties as they deal with the impact of COVID-19.
Self-employment Income Support Scheme
The government has announced a Self-employment Income Support Scheme (SEISS) to support self-employed individuals (including members of partnerships) whose income has been negatively impacted by COVID-19.
The Chancellor has confirmed the extension of the Self-Employment Income Support Scheme. Those eligible will be able to claim a second and final grant in August. The grant will be worth 70 percent of their average monthly trading profits, paid out in a single instalment covering three months’ worth of profits, and capped at £6,570 in total.
A number of updates have been made to the scheme including guidance on how HMRC works out trading profits and non-trading income. The scheme is now closed for the first grant and claims for the second and final grant can be made from 17 August.
Statutory Sick Pay Rebate Scheme
The government has launched a scheme that will provide a rebate for statutory sick pay for companies with fewer than 250 employees.
This scheme will allow small and medium sized employers, with fewer than 250 employees, to apply to HMRC to recover the costs of paying Statutory Sick Pay to their employees.
The government has announced the launch of a new online service on 26 May for small and medium-sized employers to recover Statutory Sick Pay payments they have made to their employees. This scheme will allow small and medium-sized employers, with fewer than 250 employees, to apply to HMRC to recover the costs of paying coronavirus-related SSP.
Insolvency
The Government will make changes to enable UK companies undergoing a rescue or restructure process to continue trading, giving them breathing space that could help them avoid insolvency.
Top-up to local business grant funds scheme
The government has set up an additional discretionary fund to accommodate certain small businesses previously outside the scope of the business grant funds scheme. The fund is aimed at small businesses with ongoing fixed property-related costs.
Trade Credit Insurance
The government has confirmed support for businesses with supply chains which rely on Trade Credit Insurance and who are experiencing difficulties maintaining cover due to coronavirus.
Deferral of VAT Payments
There have been temporary changes to VAT payments due between 20 March 2020 and 30 June 2020 to help businesses manage their cash flow.
Future Fund
The Future Fund will provide government loans to UK-based companies ranging from £125,000 to £5 million to innovative companies which are facing financing difficulties due to the coronavirus outbreak, subject to at least equal match funding from private investors. These convertible loans may be a suitable option for businesses that typically rely on equity investment and are unable to access other government business support programmes because they are either pre-revenue or pre-profit.
2. What if I am struggling with my tax liabilities?
This is clearly a challenging time for many businesses. The government will be looking to put in place measures to help businesses who have outstanding tax liabilities to receive support.
HMRC will waive late payment penalties and interest where a business experiences administrative difficulties contacting HMRC or paying taxes due to COVID-19.
The government has announced it will support businesses by deferring Valued Added Tax (VAT) payments. The deferral will apply from 20 March 2020 until 30 June 2020. All UK businesses are eligible.
This is an automatic offer with no applications required. Businesses will not need to make a VAT payment during this period.
HMRC has also scaled up their Time to Pay offer to all firms and individuals who are in temporary financial distress as a result of Covid-19 and have outstanding tax liabilities.
HMRC Tax Helpline
HMRC has a set up a phone helpline to support businesses and self-employed people concerned about not being able to pay their tax due to coronavirus: 0800 024 1222.
Staff
1. If employees self-isolate are they entitled to be paid?
• They have coronavirus
• They have coronavirus symptoms
• Someone in their house has coronavirus symptoms
• They have been told to self-isolate by a doctor
If someone has symptoms and lives alone, they must self-isolate for 7 days.
If someone lives in a household and is the first to have symptoms, they must self-isolate for 7 days. Everyone else in their household must self-isolate for 14 days.
If anyone else in the household starts displaying symptoms, the person with the new symptoms must self-isolate for 7 days. This is regardless of where they are in the 14-day isolation period.
2. Is SSP now payable from the first day of absence?
The prime minister has
announced that statutory sick pay will be payable from day 1 rather than day 4 in the current crisis.
The government is bringing forward legislation to allow small-and medium-sized businesses and employers to reclaim Statutory Sick Pay (SSP) paid for sickness absence due to COVID-19. The eligibility criteria for the scheme will be as follows:
• this refund will cover up to 2 weeks’ SSP per eligible employee who has been off work because of COVID-19
• employers with fewer than 250 employees will be eligible - the size of an employer will be determined by the number of people they employed as of 28 February 2020
• employers will be able to reclaim expenditure for any employee who has claimed SSP (according to the new eligibility criteria) as a result of COVID-19
• employers should maintain records of staff absences and payments of SSP, but employees will not need to provide a GP fit note. If evidence is required by an employer, those with symptoms of coronavirus can get an isolation note from NHS 111 online and those who live with someone that has symptoms can get a note from the NHS website
• eligible period for the scheme will commence the day after the regulations on the extension of SSP to those staying at home comes into force
• the government will work with employers over the coming months to set up the repayment mechanism for employers as soon as possible.
3. What if an employee does not have symptoms, but wishes to stay away from work because they are worried about getting Covid-19?
Current government advice on social distancing recommends that all employees who can work from home should do so.
If an employee’s job role does not allow them to work from home then the employer should listen to the employees concerns and, if possible, try to accommodate them.
All employers should in any case be putting in place measures to try and prevent the spread of coronavirus as much as possible.
If you are not able to put in place measures that reassure the employee enough and the employee refuses to come to work then it is arguable that the employee would be in breach of contract and would not be entitled to pay. At this stage you may wish to suggest the employee take unpaid leave on paid annual leave, if this is possible within the context of your business.
It may also be worth considering if your employees behaviour constitutes employee misconduct but any disciplinary action you take should be pursued cautiously and carefully.
4. What about vulnerable workers?
The full list of those members of society can be found on the Government website here.
The list includes those over 70, those under 70 with some pre – existing conditions and pregnant women.
For vulnerable workers, government guidelines are that they should be extra vigilant in socially distancing. Current government guidance states ‘Those who follow advice to stay at home and who cannot work as a result will be eligible for statutory sick pay (SSP), even if they are not themselves sick.
Employers should use their discretion and respect the medical need to self-isolate in making decisions about sick pay. Giving this guidance it would be advisable for employers to pay SSP to employees who fall into the at risk categories.
It should be noted that these employees may be required to self-isolate for a significant length of time.
5. What about an employee who lives with a vulnerable person?
Your employee may not themselves fall into the category of ‘vulnerable person’ but may well live with someone who does fall into the category. It is quite reasonable for them to want to protect that person as much as possible. Where possible allow them to work from home.
Current
government advice is that ‘Employees are entitled to time off work to help someone who depends on them (a ‘dependant’) in an unexpected event or emergency. This would apply to situations related to coronavirus (COVID-19). For example:
• if they have children they need to look after or arrange childcare for because their school has closed
• to help their child or another dependant if they’re sick, or need to go into isolation or hospital
There’s no statutory right to pay for this time off, but some employers might offer pay depending on the contract or workplace policy.
6. How can I support my employees who are working remotely?
With social distancing rules coming into place and workers being increasingly asked to stay at home where possible, remote working will become a reality for many workers.
British Plastics Federation member Squire Paton Boggs has produced a document looking at key employment law issues for employers, this document can be found
here
There has also been more
government guidance on working from home published. Employers and employees should discuss their working arrangements, and employers should take every possible step to facilitate their employees working from home, including providing suitable IT and equipment to enable remote working.
The HSE has provided guidance for home workers, which can be found
here.
7. Is there any guidance for my apprentices
The Department for Education has issued
new guidance regarding temporary flexibilities to the apprenticeship programme during the pandemic. These changes include:
- Confirming flexibilities to allow furloughed apprentices to continue their training and to take their end-point assessment, and that existing furloughed employees can start a new apprenticeship (as long as it does not provide service to, or generate revenue, for their employer.)
- Encouraging training providers to deliver training to apprentices remotely and via e-learning as far as is practicable.
- Allowing the modification of end-point assessment arrangements, including remote assessments wherever practicable and possible.
- Clarifying that apprentices ready for assessment, but who cannot be assessed due to COVID-19 issues, can have their EPA rescheduled.
- Enabling employers and training providers to report and initiate a break in learning, where the interruption to learning due to COVID-19 is greater than 4 weeks and including clarification on how to record breaks that occurred in March.
- Confirmation that there will be support for apprentices who are made redundant to find alternative employment, or if ready to go through gateway, will support with assessment arrangements.
8. What can I do about visa's for my staff who are foreign nationals?
The government has announced visa extensions until 31 May for all foreign nationals in the UK and a dedicated COVID-19 immigration team has been set up to make the process as straightforward as possible. Individuals who are in the UK and whose visa expired after 24 January are being urged to contact the Home Office on
[email protected], and they will be issued an extension until 31 May. This timeline will be kept under review in case a further extension is needed.
Squire Patton Boggs have produced some useful FAq's on the
immigration related impact of the Coronavirus
9. Does the working time directive still apply?
A number of BPF members have asked about the suspension of the Working Time Directive to allow longer hours. The BPF has been told that existing exemptions within the Working Time Regulations 1998 already provide flexibility.
Regulation 21(e) covers where a worker’s activities are affected by unusual and unforeseeable circumstances beyond the employer’s control, or exceptional events, the consequences of which could not have been avoided despite the exercise of all due care by the employer.
Where this applies, the requirements around rest breaks, daily and weekly rest and night work do not apply. However, the employer must provide compensatory rest, or if this is not possible to take other measures to ensure a safe working environment.
It is important that employers can demonstrate there are “other measures to ensure a safe working environment” in these circumstances.
View full legislation
10. Has annual leave entitlement changed in any way?
Your Workplace
1. Should my business continue to operate?
The Government has further clarified its position on working from home and whether certain businesses should continue to operate.
'As set out in the section on staying at home, people can travel to and from work, but only where the work they do absolutely cannot be done from home. With the exception of the organisations covered in the section on closing non-essential shops and public spaces, the government has not required any other businesses to close – indeed it is important for business to carry on.'
The full guidance can be found here
2. What if someone with Covid-19 comes to work? Do we need to close the workplace?
Reporting outbreaks of coronavirus
New
guidance for businesses and organisations on how to recognise, contain and report incidents of coronavirus has been published. Covid-19 early outbreak management information has been created to make sure that people who run businesses or organisations know how to recognise and report an incident of coronavirus and are aware of measures local health protection teams may advise in order to contain it.
3. What if we need to temporarily close our business and send staff home, e.g. because of supply chain disruption, or reduced demand for products or services?
In these uncertain times you may be forced to close your business or cut down your activities because of problems with supply chains or because of reduced demand for your product.
In such circumstances, employers may consider temporarily laying off some of their employees or reducing working hours.
You should however consider that this is likely to be considered a breach of contract, unless it has been expressly written into the contract.
If you impose a lay off or short-time working without contractual authority you could potentially face claims for unlawful deductions from wages, breach of contract or unfair dismissal.
The best way to reduce the risk of this eventuality is to consult with your employees and seek to agree with them the terms of any lay off or short-time working.
Please also note that if an employee is already on sick leave when the reduced hours or lay off period begins they cannot be put on lay off or short time working at the same time.
4. How will the government stop competition law impeding any co-operation I need to make with other businesses to help stop the crisis?
Throughout the UK, businesses are assisting in national and local efforts to tackle the consequences of the COVID-19 pandemic. The CMA has published reassurance that, provided that coordination between competing businesses is undertaken solely to address concerns arising from the current crisis and does transcend them, it will not take action.
5. How do I stop the spread of Coronavirus within my facility?
HSE has published guidance for employers and businesses in manufacturing sectors that explains how to continue or restart operations safely.
HSE also has guidance for employers who are providing hand sanitiser in their workplaces, and for existing and new manufacturers of hand sanitisers and surface disinfectants.
The BPF Coronavirus Health and Safety advice has been gathered together into a hub which you can find here
6. Can my employees catch Coronavirus from handling waste?
The Waste Industry Health and Safety Forum has provided advice on this.
Some of the latest research indicates the virus could survive on cardboard for 24 hours, and metal/plastics for up to 72 hours. It is important to note this work exposed these surfaces to high concentrations in a laboratory environment and is therefore likely to be the ‘worst case’ scenario. It is good practice to ensure a high standard of hygiene when handling waste materials, as should always be the case in waste management activities. The virus survives on the skin for more than enough time to allow hand to mouth/nose/eyes transmission.
There may be discarded materials from individuals who are themselves infected with COVID19. The public are being educated to:
▪ Double bag any discarded tissues
▪ Leave for 72 hours before placing them in the main residual waste bin
Where waste has already been designated as “clinical waste”, clinical waste procedures should already be in place that consider the potential for it to be infectious. Those procedures can be followed as normal.
The
European Commission has published guidelines for the management of waste in the context of the coronavirus.
7. Do my staff need to wear masks at work
The government has
updated its guidance for employees, employers and businesses on the use of face masks in the community. The UK does not currently advise the use of face masks outside of care settings, in line with PPE guidance.
Other Items
1. My supplier has increased their prices because of the coronavirus, is there anything I can do?
The Competition and Markets Authority (CMA) has launched a taskforce prompted by many concerns that businesses might exploit the situation to take advantage of people, for example by charging excessive prices or making misleading claims about their products.
The Taskforce will scrutinise market developments to identify harmful sales and pricing practices as they emerge. They will warn firms suspected of exploiting these exceptional circumstances – and people’s vulnerability – through unjustifiable prices or misleading claims and take enforcement action if there is evidence that firms may have breached competition or consumer protection law and they fail to respond to warnings.
Information can be found here
2. Where can I find legal advice?
BPF Members legal support helpline is available to answer questions on legal issues surrounding the COVID-19 outbreak, whilst updates on the legal situation regarding different issues can be accessed on the news page of the BPF's legal support hub (members will need login details, reset passwords here)
3. Will my commerical insurance policy cover COVID - 19?
Government guidance states that most commercial insurance policies are unlikely to cover pandemics or unspecified notifiable diseases, such as COVID-19. However, those businesses which have an insurance policy that covers government ordered closure and pandemics or government ordered closure and unspecified notifiable disease should be able to make a claim. Insurance policies differ significantly, so businesses are encouraged to check the terms and conditions of their specific policy and contact their providers.
Information regarding insurance for home workers
Many people working from home are unlikely to have home insurance policies that cover the premises being used as a place of work. An official response from the Association of British Insurers includes a pledge to support both home workers and key workers, and states that existing policies do not need to be updated.
4. How will the movement of goods and customs be affected
New government guidance was published about moving goods and clearing customs during the coronavirus (COVID-19) outbreak. Additional, temporary changes to customs policy and authorisations to assist businesses were also published online.
