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Some further clarification is now emerging around financial help available to businesses during lockdown. We can all be forgiven for furrowing our brows as we try to get to grips with what comes next depending on where our businesses are based, so we have endeavoured to provide some guidance on the current situation (as of 6th Nov), which, of course, comes with the caveat that this could 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 – 2-week ‘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
• For properties with a rateable value of between £15k-£51k grants to be £2,000 per month, or £1,000 per two weeks;
• For properties with a rateable value of £51k or over grants to be £3,000 per month, or £1,500 per two weeks.
More information around the details of these grants and how to access are expected to be communicated shortly.
Wales
Wales is currently locked down until midnight on Sunday 8th November and 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, with 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) and occupy properties with a rateable value of between £12,001 and £51,000 and further amounts both nationally andlocally. Business Wales has further information and detail.
Scotland
The 5-tier system will remain, but the Job Support Schemes (JSS open and closed) have been postponed and the new Furlough scheme will be available, again 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 at www.gov.scot/publications/coronavirus-covid-19-restrictions-fund
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: https://www.nibusinessinfo.co.uk/business-support.
General Information & Q&As
1. What about the Job Support Scheme? The JSS scheme is being postponed indefinitely and the Job Retention Scheme (JRS) furlough scheme is being re-introduced with more flexibility, now until March 2021.
2. What will the New Scheme Pay?
Eligible employers who furlough eligible employees will be able to obtain a grant from the JRS to cover 80 per cent 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 and can claim 80 per cent of wage costs for unworked hours to a maximum which is proportionately reduced in accordance with the number of unworked hours. Businesses that can keep going (depending on national rules e.g. Scotland and NI and potentially Wales at a later date) 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, as well as guidance 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.
3. 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.
4. Which employees can be furloughed under the extended JRS? To be eligible to be claimed for under this extension, employees must be on an employer’s PAYE payroll by 23:59 30 October 2020. This means a Real Time Information (RTI) submission notifying payment for that employee to HMRC must have been made between 20 March 2020 and 30 October 2020.
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, they can also qualify for the scheme if you re-employ them.
Employees can be on any type of contract and, 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) and salaried members of Limited Liability Partnerships (LLPs) etc.
5. Is agreement from employees to be furloughed required under the extended JRS?
In all cases, you should discuss the situation with employees and 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 and ensure they agree to be furloughed under the JRS during November and any further possible extension.
The agreement should cover both changes to working hours and a reduction in pay (if you are not choosing to top up pay to the full amount the employee would normally receive). It should also instruct employees to cease to do all work during the furloughed hours.
6. 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 per cent 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 and therefore count towards hours in respect of which wages can be claimed for.
7. 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 which 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 provided that their employment contract allows for it.
8. 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 to confirm to employees that, during their nonworking 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, rather than 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 Job Retention Scheme ends.
9. 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 and 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 and 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.
Note: The information provided in this briefing was correct at time of publication, however this guidance must be viewed and interpreted within the context of your own business and based on any changes – clarification that is subsequently issued by HMRC and/or HM Government.
Produced by Petaurum Solutions on behalf of the British Footwear Association
