Business Guide to the Coronavirus – Updated 31/3/20

Business guide to the coronavirus

Contents

  • Business Support
    • Self-employment Income Support Scheme
    • Coronavirus Job Retention Scheme
    • Small Business Grant Funding
    • Business Rates Holiday
    • Cybersecurity
    • Coronavirus Business Interruption Loan Scheme
    • VAT Payment Delay
    • Companies House Filing Extention
    • Economic Resilience Fund (Wales)
    • Other business support
      • Self-assessment tax payment window extended
      • Welfare Support Package
      • The Development Bank of Wales
      • Loan Repayment
      • Insurance
  • Employers Duty of Care
  • Working From Home
  • Sickness Policy
    • Sickness pay if someone has to go into self-isolation
    • What if an employee is not sick but the employer tells them not to come into work
    • What if an employee does not want to go to work?
    • What if someone becomes unwell at work?
    • What if someone with COVID-19 comes into work?
    • What if an employee is unwell at home but hasn’t been tested?
    • What if I’m self-employed and I have to self-isolate?
  • Statutory Sick Pay
  • Lay-offs and short-time working
  • Asking employees to use holiday
  • Mortgage holidays
  • Landlords and tenants
  • What happens if I need to close my business?
  • Useful contact information

Business Support

Coronavirus - business support

Self-employment Income Support Scheme

On Thursday 26 March, Chancellor Rishi Sunak made his long-awaited statement about the COVID-19 government support scheme for the self-employed, called the Self-employment Income Support Scheme (SEISS).

This scheme will allow businesses to claim a taxable grant worth 80% of trading profits up to a maximum of £2,500 per month for the next three months. The
government has stated that this will be extended if need be.

It’s open to those who:

  • have submitted their 2018/19 selfassessment return
  • traded in 2019/20 are trading when they apply (or would be except for COVID-19)
  • intend to continue to trade in 2020/21 and
  • have lost trading/partnership trading profits due to COVID-19.

They have also stated that your self-employed trading profits must be
less than £50,000 and more than half of your total income. This is
determined by at least one of the following conditions being true:

  • having trading profits/partnership trading profits in 2018/19 of less than £50,000 and these profits constitute more than half of your total taxable income.
  • having average trading profits in 2016/17, 2017/18, and 2018/19 of less than £50,000 and these profits constitute more than half of your average taxable income in the same period.

If your business started trading between 2016 to 2019, HMRC will only use those years for which a return has been filed.

Any outstanding 2018/19 returns must be filed by 23 April 2020.

You’ll get a taxable grant of 80% of the average profits from the years (where applicable) 2016/17, 2017/18 and 2018/19.

HMRC will add together the total trading profit for the 3 tax years (where applicable) then divide by 3 (where applicable) and use this to calculate a monthly amount up to a maximum of £2,500 per month for 3 months.

The grant will be paid directly into a bank account in one instalment and will start to be paid at the beginning of June. HMRC will contact relevant businesses if they are eligible for the scheme and invite them to apply online.

Those who pay themselves a salary and dividends through their own company are not covered by the scheme but will be covered for their salary by the Coronavirus Job Retention Scheme if they are operating PAYE schemes.

Coronavirus Job Retention Scheme

For the first time in this country’s history, the government is going to step in and help to pay people’s wages through the new Coronavirus Job Retention Scheme.

Who is eligible?

The scheme is open to all UK employers that had a PAYE scheme in place on 28 February 2020.

To be eligible, the employee must have been on the payroll on 28 February 2020. If they were hired later, they are not eligible. Anybody who was on the payroll on 28 Feb and has since been made redundant can be rehired and put on the scheme.

What funding is available?

You can reclaim up to 80% of wage costs up to a cap of £2,500 per month, plus (not including) the associated employer NICs and minimum auto enrolment pension contributions on that wage. Fees, commissions and bonuses are not included.

An employer can choose to top up salaries to 100%, but they don’t have to.

For employees whose pay varies, the employer can claim for the higher of:

  • the same month’s earning from the previous year, or
  • average monthly earnings in the 2019-20 tax year.

Individuals are only entitled to the minimum wage for the hours they work. So if they are furloughed and do not work, and 80% of their normal earnings would take them below the minimum wage based on their normal working hours, they still only receive 80% as they are not working. However, they are entitled to be paid NMW for any time spent training.

How will the furlough work?

Furlough leave must be taken in minimum blocks of three weeks to be eligible for funding.

There is nothing in the guidance currently which prohibits rotating furlough leave amongst employees, provided each employee is off for a period of at least three weeks.

The employee must not be working at all. If they work for even an hour (presumably during their entire three week furlough period), they are not
eligible. However, they can undertake training and do volunteer work, provided they do not provide services to or make any money for their
employer.

When agreeing changes in hours (and acceptance of 80% pay), normal employment law applies. You must be careful not to discriminate in deciding
who to offer furlough too. However, prioritising vulnerable workers is now unlikely to be seen as discrimination: e.g. prioritising those with serious underlying health conditions.

Employees on sick leave or self-isolating cannot be furloughed but can be furloughed once they return to work.

Employees on maternity (or similar) leave can continue to draw SMP (or similar) payments. The guidance does not prohibit women on maternity leave agreeing to return to work early and then being furloughed, or electing to a change to shared parental leave and then being furloughed.

Employers can only claim once every three weeks and claims can be backdated to 1 March 2020.

The government will issue further guidance on the mechanics of claiming the payment in due course. They expect the scheme to be up and running by the end of April.

Small Business Grant Funding

There will be a £10,000 cash grant to businesses currently eligible for Small Business Rate Relief or Rural Rate Relief. We understand that this will be applied per business, but we are awaiting clarification.

This will be delivered by Local Authorities. You do not need to apply, you will be contacted in early April.

If your business is in the retail, hospitality or leisure sector there is a grant fund open of £25,000, for businesses with a rateable value between £12,000 and £51,000.

This will be delivered by Local Authorities. To find out how to access the grant, you should visit the relevant local authority’s web page:

South East Wales

South West Wales

Mid Wales

Pubs in Wales with a rateable value of between £51,000 and £100,000 will receive a £5,000 reduction on their bill.

Business Rate Holiday

For those businesses in the retail, hospitality and leisure sectors, there will be a 12 month business rates holiday from April 2020 to March 2021.

To benefit from this relief, business must be in occupation of properties that are wholly or mainly being used as:

  • Shops
  • drinking establishments
  • cinemas and live music venues
  • Restaurants & cafes
  • hotels, guesthouses, boarding and lodging premises
  • self-catering accommodation

To support nurseries at this time, the Chancellor has also decided that they will also now be eligible for a business rates holiday for one year. That means non-local authority providers of childcare will pay no business rates in 2020-21, from 1 April.

Cybersecurity

It has been identified that sadly cybercriminals are using the coronavirus as an opportunity to take advantage of fearful people who are trying to protect themselves from the virus.

Here are a few things to look out for when deciding if an email is fraudulent:

  • If an email asks for personal information such as bank account details do not trust it.
  • Check that the senders email is legitimate.
  • Hover your mouse (don’t click) over linked text to see if the link looks weird.
  • Look out for spelling mistakes and poor grammar.
  • Be wary of emails not addressed to you personally.
  • Beware of subject lines that evoke fear e.g. “Your account has been suspended”.
  • Check that the signature contains legitimate contact details.
  • Don’t open email attachments that you weren’t expecting.

Coronavirus Business Interuption Loan Scheme (CBILS)

The government have launched a new, temporary Coronavirus Business Interuption Loan Scheme, delivered by the British Business Bank.

Key features are:

  • Up to £5m facility available on repayment terms of up to six years.
  • The scheme provides the lender with a government-backed, partial guarantee (80%) against the outstanding facility balance, subject to an overall cap per lender.
  • No guarantee fee for SMEs to access the scheme.Interest and setup fees paid by Government for 12 months.
  • Finance terms are up to six years for term loans and asset finance facilities. For overdrafts and invoice finance facilities, terms will be up to three years.
  • At the discretion of the lender, the scheme may be used for unsecured lending for facilities of £250,000 and under. For facilities above £250,000, the lender must establish a lack or absence of security prior to businesses using CBILS. If the lender can offer finance on normal commercial terms without the need to make use of the scheme, they will do so.
  • The borrower always remains 100% liable for the debt.

To be eligible for support, the small business must:

  • Be UK-based in its business activity, with annual turnover of no more than £45m.
  • Have a borrowing proposal which, were it not for the current pandemic, would be considered viable by the lender, and for which the lender believes the provision of finance will enable the business to trade out of any short-to-medium term difficulty.

Find out how to apply here.

VAT Payment Delay

The government has announced further cashflow support for businesses through the tax system, deferring the next quarter of VAT payments until at least the end of June. Businesses will have until the end of the financial year to repay these bills.

You do not need to inform HMRC if you wish to defer payment. You can opt in to the deferral simply by not making VAT payments due in this period. If you pay by Direct Debit you should cancel this with your bank. You should do so in sufficient time so that HMRC does not attempt to automatically collect on receipt of their VAT return.

Should you wish, you can continue to make payments as normal during the deferral period.

HMRC will also continue to pay repayment claims as normal.

You must continue to submit VAT returns as normal.

Companies House Filing Extension

Businesses affected by the COVID-19 pandemic can now apply to Companies House to request an extension to file their accounts, reports and confirmation statements.

The maximum extension is three months, but stringent conditions apply, the most important being that any appeal must be lodged before a company’s filing deadline.

Applications can be made through a fast-tracked online system which will take just 15 minutes to complete.

Economic Resilience Fund

Business Wales has announced an Economic Resilience Fund, where businesses can benefit from a £400 million emergency pot.

It’s said to provide:

  • grants of £10,000 for micro-businesses employing up to nine people. This includes sole traders employing staff. Qualifying businesses will be able to apply by mid-April.
  • grants of up to £100,000 for small and medium sized firms with between 10 and 249 employees. Qualifying businesses will be able to apply by mid-April.
  • Support for larger Welsh companies, which are of critical social or economic importance to Wales. This element will be open to qualifying businesses within the next two weeks.

Details of the application process and eligibility are being finalised and will be
published on their website shortly.

Other business support

Self-assessment tax payment window extended

To support the self-employed through the tax system, the next self-assessment payments will be deferred to Jan 2021.

Welfare Support Package

Universal Credit Standard Allowance and Working Tax Credit basic element have both been increased by £1,000 a year.

The Development Bank of Wales

The Development Bank of Wales has loan and equity funding available immediately to Welsh businesses. The Welsh Government is working closely with the Development Bank of Wales to consider additional support to help businesses through the COVID-19 impact.

Loan Repayment

Feedback from the banks implies that if you apply to take a loan payment holiday they will be flexible regarding extending the loan period or allow you to increase payments further down the line and keep the loan period the same.

Rules over annual leave relaxed

Workers who have not taken all of their statutory annual leave entitlement due to COVID-19 will now be able to carry it over into the next 2 leave years.

Insurance

Businesses that have cover for both pandemics and government ordered closure should be covered. The government and insurance industry confirmed that advice to avoid pubs, theatres etc. is sufficient 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.

Most businesses are unlikely to be covered, as standard business interruption insurance policies are dependent on damage to property and will exclude pandemics.

Employers duty of care

Coronavirus - Employers duty of care

As an employer you have a duty of care to your staff and others who come onto your premises.

Measures you should take include:

  • Where possible terminate face-to-face contact with people outside of your organisation. Consider using video conferencing facilities such as Skype, Zoom and Facetime for meetings.
  • The government has asked that non-essential travel be curtailed and so travel to meetings, conferences and other work-related appointments should be stopped if at all possible.
  • In line with the government recommendations wherever possible staff should now be encouraged to work from home, particularly if they fall into any of the vulnerable categories.
  • Encourage staff to wash hands regularly.
  • Regularly clean and disinfect surfaces, such as door handle and doorknobs.
  • It is important to maintain contact with staff who are working from home to ensure their wellbeing.
  • Make anti-bacterial soap available in toilets and kitchens.
  • Reduce personal contact such as shaking hands.
  • Keep everyone updated on actions being taken to reduce risks of exposure in the workplace.

Working From Home

Coronavirus - working from home

As more and more staff are moving over to homeworking due to childcare issues, self-isolating or because they are vulnerable, employers need to consider how best to support these individuals.

Here are some things you need to think about:

  • Ensure the employee has the required equipment, if not consider purchasing additional computers/ laptops.
  • Ensure they maintain daily contact with line managers.
  • Set out clear expectations around the tasks to be completed.
  • Keep a check on the employees wellbeing, especially if they are in isolation. Perhaps carry out regular Skype / Zoom calls.
  • Recommend that the employee sets up a comfortable well-lit area to work in, and ensure they are taking regular breaks.
  • Consider all health and safety aspects of having staff work from home.

ACAS have put together a guide for employers and employees which may give you further guidance. You can access it here.

Sickness Policy

Coronavirus - sickness policy

The workplace’s usual sickness entitlements apply if someone has the coronavirus (COVID-19).

Employees should inform their employer as soon as possible if they’re not able to go into work and how long they’ll be off for.

Sickness pay if someone has to go into self-isolation

If a staff member needs to self-isolate because they, or a member of their household, has developed symptoms of the coronavirus, they should at a minimum receive Statutory Sick Pay (SSP) due to them.

Employers should not require a sick note from staff in this position, they should simply keep records of absences and payments of SSP.

What if an employee is not sick but the employer tells them not to come into work?

If an employee is not sick but their employer tells them not to come to work, they should get their usual pay. For example, if someone has returned from China, Italy or another affected area and their employer asks them not to come in.

What if an employee does not want to go to work?

Some people might feel they do not want to go into work if they’re afraid of catching the coronavirus.

An employer should listen to any concerns staff may have.

If there are genuine concerns, the employer must try to resolve them and protect the health and safety of their staff. For example, if possible, the employer could offer flexible working.

If an employee still does not want to go in, they may be able to arrange with their employer to take the time off as holiday or unpaid leave.

The employer does not have to agree to this, however and if an employee refuses to attend work, it could result in disciplinary action.

What if someone becomes unwell at work?

If an employee is displaying symptoms of coronavirus in the workplace, they should go home and self-isolate, along with all members of their household, for 14 days.

What if someone with COVID-19 comes into work?

If someone with coronavirus comes to work, the workplace does not necessarily have to close.

The local Public Health England/Wales health protection team will get in contact with the employer to:

  • discuss the case and identify people who have been in contact with the affected person.
  • carry out a risk assessment and advise on any actions or precautions to take.

What if an employee is unwell at home but hasn’t been tested?

Anyone with a “new, continuous” cough or high temperature is now advised to self-isolate, along with all members of their household, for fourteen days, as the UK government continues with its plan of actioning the “delay” phase.

What if I’m self-employed and I have to self-isolate?

Those who are not eligible for SSP can now easily make a claim for Contributory Employment and Support Allowance.

Contributory Employment and Support Allowance will be payable, at a rate of £73.10 a week if you are over 25, for eligible people affected by COVID-19 or self-isolating in line with advice from Day 1 of sickness, rather than Day 8.

Statutory Sick Pay

Coronavirus - statutory sick pay

The government will bring 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:

  • The 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 sick note.
  • Eligible period of the scheme will commence the day after the regulations on the extension of Statutory Sick Pay 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.

Those who follow advice to stay at home will now also be eligible for statutory sick pay (SSP) from the first day of their absence from work.

Self-employed people can now access in full, universal credit, at a rate equivalent to SSP for employees.

Agricultural employees in Wales are entitled to the Minimum Agricultural Wage rates set for agricultural workers rather that the SSP rates. There is no equivalent Agricultural Wages Board in England.

Lay-offs and Short-time Working

You can ask your staff to stay at home or take unpaid leave if there’s not enough work for them.

A lay-off is if you ask a staff member to be off work for at least 1 working day. Short-time working is when their hours are cut.

How long you can a staff member be laid off for?

There’s no limit for how long you can lay off a staff member for or put on short-time working. They can apply for redundancy and claim redundancy pay if it’s been:

  • 4 weeks in a row
  • 6 weeks in a 13-week period.

Lay-off pay entitlement and short-time working payments

You should pay your staff full pay unless their contract allows unpaid or reduced pay lay-offs.

If they’re unpaid, they’re entitled to guarantee pay.

Guarantee pay

Rate and length of statutory lay-off pay

Staff members are entitled to guaranteed pay during lay off or short-time working. The maximum they can get is £29 a day for 5 days in any 3-month period – so a maximum of £145.

If they usually earn less than £29 a day they should be paid their normal daily rate.

If they work part-time, the entitlement is worked out proportionally.

They cannot claim guarantee pay for any day that they do some work.

Eligibility for statutory lay-off pay

They must:

  • have been employed continuously for 1 month (includes part-time workers)
  • reasonably make sure they are available for work
  • not refuse any reasonable alternative work (including work not in their contract)
  • not have been laid off because of industrial action.

Asking employees to use holiday

coronvirus - asking employees to work from home

Employers have the right to tell employees and workers when to take holiday if they need to. For example, they can decide to shut for a week and everyone has to use their holiday entitlement.

If the employer does decide to do this, they must tell their staff at least twice as many days before as the number of days they need people to take.

For example, if they want to close for 5 days, they should tell everyone at least 10 days before.

This could affect the holidays staff have already booked or planned. So employers should:

  • explain clearly why they need to close.
  • try and resolve anyone’s worries about how it will affect their holiday entitlement or plans.

Mortgage Holidays

Britain’s banks have revealed how they are going to implement Rishi Sunak’s promise of “payment holidays” of up to three months.

In guidance issued after the chancellor pledged mortgage support for households affected by the coronavirus, UK Finance, the trade body for the major banks, set out how households can apply.

There will be a fast-track system for approval, but not everyone will be granted a payment holiday. The unpaid interest will still be recovered later, but individual credit ratings will not be affected.

“Firms will help customers in the best way for the individual, but an automatic payment holiday may not always be the most suitable approach and may not be required by all customers,” said UK Finance.

The holidays will not constitute free money. The banks said they remain obliged under Financial Conduct Authority rules to ensure that any “forbearance” will still assume an eventual full repayment of arrears.

While a person is taking a payment holiday, the interest that would have been paid will still rack up, and the capital sum of the loan remains.

Repayment holidays won’t kick in automatically. Instead, borrowers who are concerned about meeting their repayments as a result of the outbreak should contact their lender ‘at the earliest possible opportunity’.

Payment holidays are a short-term measure. If you pause your payments, the capital you owe will remain the same, but interest will continue to accrue, meaning it will take you longer and cost you more to pay off your mortgage. UK Finance says lenders will contact customers at the end of the agreed payment holiday to assess their circumstances. If borrowers are in financial difficulty, the lender will ‘come to an arrangement to recover the customer into a sustainable position on their mortgage’, while minimising the risk of repossession.

It will be important for anyone taking a mortgage holiday to speak to their individual lender to check what they are doing to minimise the impact on their credit score.

On 18 March, UK Finance provided new guidance confirming that lenders offering payment holidays are not expected to register late or missing payments on customers’ credit reports, but that the responsibility lies with the bank in question. We would advise each individual to communicate with their lender before making any decisions.

Landlords and Tenants

coronavirus - mortgage holiday, landlords and tenants

As part of their ongoing response to the coronavirus pandemic, the Government has now announced a series of temporary reforms to the private rented sector.

Tenants

The package of reforms to help renters announced are:

  • emergency legislation to prevent existing and new eviction proceedings for at least the next three months
  • widening the pre-action protocol for social landlords to include private rented sector landlords
  • ensuring that buy-to-let lenders will offer up to a three month mortgage holiday for private landlords whose tenants have been impacted by the coronavirus. This is on the understanding that landlords will be expected to offer a similar rent holiday to their tenants.

Landlords

The NLA and RLA have jointly taken action for their members including:

  • approaching government representatives and others involved in the industry asking for support for tenants and landlords affected by the outbreak.
  • calling for Government to temporarily scrap asking the Government to suspend the implementation of the final phase of restrictions on Mortgage Interest Relief, due to come into force in April.
  • successfully lobbying mortgage lenders and the UK government for financial assistance in the form of mortgage holidays for landlords.

In addition any RLA members who are affected can contact them for advice on 03330 142 998.

They have also produced the following guides:

What happens if I need to close my business?

Coronavirus - What if I have to close my business

It is advisable for employers to have a plan in place in case they need to close the workplace temporarily.

For example, where it is possible for staff to work from home, they should ensure systems are in place and operating as they would need to.

Where work can be done at home, the employer could:

  • ask staff who have work laptops or mobile phones to take them home so they can carry on working.
  • arrange paperwork tasks that can be done at home for staff who do not work on computers.

Business Wales has informed us that should you need to close your business due to the coronavirus, should you be eligle for the grant, you will still receive it. The primary purpose of the grant is to enable businesses to get through this difficult period and to re-open again in the future.

If you are not currently eligible for the support available because you do not pay business rates they suggest that news is expected regarding new avenues of support for those businesses who need help.

Cashflow

In these difficult times you may be looking for ways to work smarter and leaner to cut costs and manage cash flow.

We propose the following list of ideas for you to consider:

HMRC’s Time to Pay Scheme

All businesses in financial distress, and with outstanding tax liabilities, may be eligible to receive support through HMRC’s Time To Pay service.

If you call their dedicated helpline, 0800 0159 559, they have offered to support people with their outstanding tax affairs.

Through this, you may be able to agree a bespoke payment plan which could include deferring payments.

Mortgage/business loan holiday

British banks have revealed that they are going to offer a mortgage payment holiday of up to three months. We encourage you to speak to your mortgage provider and discuss your options.

You could explore the option of having a business loan holiday.

Feedback from banks implies that they are going to be flexible with their customers to help them through this difficult time.

Reduce outgoing costs

Review all costs and reduce any non-essential spending.

For example, travel, marketing, subscriptions etc.

Suppliers

Speak to your suppliers about postponing or reducing orders, or agree a payment plan.

Debtors

Spend time chasing outstanding debtors whilst being cautious of their financial strains in this difficult time.

Business Support

The government have set out a number of provisions to support businesses.

We would advise you to explore the packages listed in our business support section of the guide.

Useful Contact Information

Coronavirus - Useful contact information

The links below will take you to further information on specific subject areas:

  • Welsh Government Support – Information on support available, including Business Rate Relief and Business Grant Schemes
  • Business Wales – If you are currently experiencing issues or have any concerns with regards to your business operations/supply chain contact the Business Wales helpline on 03000 6 03000.
  • HMRC – A dedicated helpline has been set up to support businesses who are in financial distress and need help with their outstanding tax affairs. Through this, you may be able to agree a bespoke payment plan. If you are concerned about being able to pay your tax due to COVID-19, call HMRC’s dedicated helpline on 0800 0159 559.

We have been asked to provide the government with specific challenges being faced by businesses in the current circumstances.

If you have any areas of concern, please inform us by contacting katie@greenandco.com and we can action the information accordingly.

We can assure you that we will keep your personal details confidential.

Due to the fast moving nature of the virus, please check that nothing has changed since publication.

2 thoughts on “Business Guide to the Coronavirus – Updated 31/3/20

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