Coronavirus News Update

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23 March, 2020

Coronavirus News Update

As of 20 March 2020, the government has ordered all leisure facilities such as restaurants (unless they can offer takeaways), pubs, cafes, theatres, gyms to close. Large chain restaurants such as McDonalds, Costa Coffee and Nando's have taken the decision to close by the end of 23 March.

Coronavirus job retention scheme-

The Government announced on Friday that it is introducing a coronavirus job retention scheme to ensure that jobs are not lost through redundancy during this period where employers cannot afford to keep employees. Employers can contact HMRC for a grant in order to avoid having to lay off employees. A grant of 80% of the employee's wage costs, up to a total of £2500 per month, will be made available to 'furloughed employees'. As an employer, you can top this up to the employee's total salary if you can afford to do so. The grant has initially been rolled out for a period of 3 months however the Government has stated that this will be extended if this becomes necessary. The first grants are expected to be paid within weeks and the Government is aiming to implement this before the end of April.

The Government has stated that employers must inform employees that their employment status will change to a 'furloughed worker' and agree this with them. Changing the status of employees remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation.

Once employees are designated as 'furloughed workers', employers must submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal (HMRC will set out further details on the information required). Employees will not be able to work during any period that they are designated at 'furloughed workers'.

There are still number of questions unanswered by the guidance, which can be found at https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-support-for-businesses#support-for-businesses-through-the-coronavirus-job-retention-scheme

We are supporting employers through this crisis and, in particular, helping to implement this new scheme so please get in touch as below if you require help.

Loans, grants and guarantees.

In an effort to make money available, the Government will offer firms (with a turnover up to £45m a year) interest free loans of up to £5m for up to 12 months.

Another initiative starting Monday is the deferring until next quarter of VAT payments, no business will have to pay from now until end of June.

Self-assessment income tax payments for July 2020 deferred for six months.

Further updates

There will be a national advertising campaign to communicate support that will be available to businesses and people so that they can look carefully at all the options and hopefully avoid having to lay people off. This is a national effort to protect jobs, although there may be more job losses to come and the Government can't promise that some of us won't face hardship. The Government is acting to protect where it can so that if the worse happens, we are prepared.

Further initiatives include:

  • Increasing universal credit standard allowance,
  • Increasing working tax credit both by £1000 a year protect most vulnerable homes.
  • Self-employed - suspending minimum income, can access universal credit at rate equivalent to SSP.
  • Next self-assessment deferred to January 2021.
  • 3 month mortgage holiday if needed,
  • 1 billion support for lenders increasing housing benefit and universal credit to cover market rent.

For more information contact Charlotte Black in our Employment & HR department via email or phone on 0333 207 1130. Alternatively send any question through to Forbes Solicitors via our online Contact Form.

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