What’s the Situation for Business Support Amongst the Ever Changing COVID Lockdown Rules?

Some details are now emerging of COVID business support and financial help in lockdown.

We can all be forgiven for the throwing of hands in the air and gritting of teeth as we try to get to grips with what comes next depending on where our businesses are based.

Here’s the current situation (today, 6 Nov 2020).

This naturally comes with the caveat that this could (and likely will) change rapidly and we will update as we become aware of the changes.

Current Lockdown in each of the Four Countries

  • Scotland – 5 tiers
  • England – full lockdown
  • Wales – ‘firebreak’ ending on 9 November
  • Northern Ireland – full lockdown with local restrictions

England

Full lockdown as of 6pm on Thursday 5 November following the parliamentary vote. The current plan is for the lockdown to end on 2 December. But it will be reviewed ahead of that date and may be extended.

As non-essential businesses must close during this period, the new furlough extension will contribute 80% of employee wages.  The employer can choose whether to top up and must pay NI and Pension contributions.

Businesses required to close in England due to local or national restrictions will be eligible for the following, for properties with a rateable value of:

  • £15k or under, grants to be £1,334 per month, or £667 per two weeks
  • Between £15k-£51k grants to be £2,000 per month, or £1,000 per two weeks;
  • £51k or over grants to be £3,000 per month, or £1,500 per two weeks.

More information should be available shortly.

Wales

Wales is currently locked down until midnight on Sunday 8 November. The first Minister has announced that there will be no extension.

Businesses will open again but there will be some restrictions on the hospitality sector. These rules to be announced imminently, together with a review of the need to introduce further measures if necessary.

Should there be further lockdown in Wales the newly announced furlough scheme will apply.

There is a lockdown fund that pays £5,000 for retail, leisure and hospitality businesses that:

  • Have been forced to close (as defined by the regulations)
  • Occupy properties with a rateable value of between £12,001 and £51,000 and further amounts both nationally and locally. 

Business Wales has further information and detail.

Scotland

The 5-tier system will remain. However, the JSS scheme has been postponed in Scotland and the new Furlough scheme will be available,. This is pending a review on or before 2 December.

There is a set of business grants and loans available also, which can be accessed at Business Scotland.  The Business Interruption Loan scheme has been extended through to 31 January 2021. More information on the COVID-19 Restrictions Fund here,

Northern Ireland

Current restrictions continue to apply pending review by 13 November.

Businesses will now be able to access the flexible furlough scheme.  Support for business is through local administration and more information can be found at here

COVID Business Support FAQs

What about the JSS Scheme?

The JSS scheme is being postponed indefinitely and the furlough scheme is being re-introduced with more flexibility. This is now until March 2021.

What will the New Scheme Pay?

Eligible employers who furlough eligible employees will be able to obtain a grant from the JRS.

This will cover 80% of furloughed employees’ wage costs for unworked hours, to a maximum of £2,500 per employee per month. Businesses will be paid upfront to cover wages costs.

When an employee is on full furlough, no wage contribution is needed from the employer.

Flexible furlough rules mean that the employer pays the employee for the hours worked. They can claim 80% of wage costs for unworked hours. This is to a maximum which is proportionately reduced in accordance with the number of unworked hours.

Businesses that can keep going will be able to put some staff on furlough whilst keeping others working.  The scheme will also pay 80% of the hours not worked for business that have to reduce hours for some employees.

In both cases, employers can choose to top up pay to the amount the employee would normally receive.

Employers will need to pay National Insurance and auto-enrolment pension contributions for hours not worked in addition to hours worked.

The Government will publish further guidance on how to calculate an employee’s normal pay. This will also include information on how to make the claim. When claiming the grant for furloughed hours, employers will need to report and claim for a minimum period of 7 consecutive calendar days.

Which employers can use the extended JRS?

All employers with a UK bank account and UK PAYE schemes can claim the grant.

Importantly, employers do not need to have used furlough before in order to use it during November. However, all employers will need to meet the eligibility requirements.

Which employees can be furloughed under the extended JRS?

To be eligible, employees must be on an employer’s PAYE payroll by 23:59 30 October 2020.

This means a Real Time Information (RTI) submission must have been made between 20 March 2020 and 30 October 2020. An RTI is notification of payment for that employee to HMRC.

Employees do not need to have been furloughed before in order to be placed into the JRS during the extension. However, all employees will need to meet the eligibility requirements.

If employees were:

  • On your payroll on 23 September 2020 (i.e. notified to HMRC on an RTI submission on or before 23 September)
  • AND were made redundant or stopped working for you afterwards

Then they can also qualify for the scheme if you re-employ them.

Employees can be on any type of contract.

If the JRS continues to operate in the same way as previously in respect of its scope, this will include:

  • Workers
  • Agency workers
  • Office holders (including company directors)
  • Salaried members of Limited Liability Partnerships (LLPs)
  • And others

Is agreement from employees to be furloughed required under the extended JRS?

In all cases, you should discuss the situation with employees. Agree with them that you are designating them as a furloughed worker, either under full furlough or flexible furlough.

If you had already agreed with employees to be placed into the now postponed Job Support Scheme (Open) or Job Support Scheme (Closed), you will need to revisit the agreement. Ensure they agree to be furloughed under the JRS during November and any further possible extension.

The agreement should cover:

  • Changes to working hours
  • A reduction in pay (if you are not choosing to top up pay to the full amount the employee would normally receive).
  • Instruction to employees to cease to do all work during the furloughed hours.

Can employees take annual leave during furlough from November?

Further guidance is needed on this; however, it is expected that annual leave will operate in the same way as under previous furlough rules. These rules confirmed that annual leave continues to accrue during furlough.

Annual leave can be taken during furlough but employers must pay the employee’s normal pay i.e. 100% of normal pay for any annual leave. Wage grants can be claimed during annual leave but will still be subject to the maximum grant available. Employers will be able to require annual leave to be taken or refuse requests from employees.

During flexible furlough, previous rules confirmed that annual leave taken during working hours will be treated as unworked hours. It would therefore count towards hours in respect of which wages can be claimed for.

Can employees do any work during furlough in November and beyond?

Previous rules also prohibited the employee from doing any work for you during their furloughed hours. This means any activity that provided services to you or generated revenue for you or any associated organisation.

It is expected that the previous rules regarding finding work elsewhere will continue to apply, however, confirmation is needed. This means that employees can obtain work with another employer when they are on furlough with you. This is provided that their employment contract allows for it.

What should I do if I have already agreed with employees that they will be placed into the Job Support Scheme?

Due to the very late confirmation that the JRS was to be extended, some employers may have already taken steps to agree with their employees’ participation in either the now postponed Job Support Scheme Open or Closed.

Such employers should now re-visit those agreements and confirm the following details:

During their non-working hours in November and for as long as the extended JRS lasts, or until working conditions change, they will be classed as being on furlough under the JRS.

This is instead of the Job Support Scheme, and the payment arrangements of the extended JRS will apply.

The overall result of this is that employees will receive a higher rate of pay under the JRS.

The Job Support Scheme will not be introduced until after Coronavirus Job Retention Scheme ends.

Support for Businesses through the Coronavirus Business Interruption Loan Scheme via the British Business Bank.

The scheme will deliver loans of up to £5 million for eligible businesses. It is interest free for 12 months and is open until 30 November.

  • The Bounce Back Loan scheme will help small and medium-sized businesses to borrow between £2,000 and £50,000. The UK Government will guarantee 100% of the loan. There won’t be any fees or interest to pay for the first 12 months
  • UK-based start-ups and scale-ups can apply for the Future Fund, delivered in partnership with the British Business Bank. Eligible companies can apply for a convertible loan of between £125,000 and £5 million. The Fund will be open until 30 November 2020.
  • Small businesses and employers across the UK who have paid statutory sick pay to staff taking coronavirus-related leave can claim back the money.

Learn More about COVID business support

More information on COVID Business Support Measures

Get more Coronavirus, Furlough and Redundancy FAQs

What is The Role of HR in COVID-19?

Need Support?

If you need help deciphering the current COVID business support information, drop us an email. We’re happy to clarify on all areas of HR!

info@petuaurmsolutions.co.uk