You will have heard that there is a developing package of help for those affected by Covid-19.
The exact details of how and when are evolving, however there are some core decisions which employers will have to make – probably before the details are published.
I encourage you not to make snap decisions – you may have spent many years building your business – and we want it there when this is over.
If your business operates in one of the sectors that has been already recognised as affected eg hospitality or leisure you will be clear that many of the measures will apply to you – it is becoming apparent that many more businesses are affected – those which rely on footfall or people coming into contact with each other – dentists, estate agents, hair salons etc etc. These may all be eligible for help.
The two areas for focus right now are related to property and employees.
Property – if you operate from business premises and hence have a business rateable value you may be entitled to a one-off grant.
This does not need to be applied for and will arrive in April.
I have spoken with Melton BID who have assured me that the process for getting this out to businesses swiftly in April is being worked on – if your business is elsewhere then your local council should be similarly gearing up for this.
£10,000 – ANY business entitled to Small Business Rate Relief or Rural Rate Relief
£25,000 – to businesses in retail, leisure and hospitality with a rateable value between £15,000 and £51,000
In addition ANY business in retail, leisure and hospitality and Nursery businesses will pay NO business rates for the next year.
SO – find your rates bill to clarify how much cash will be coming into your bank in April.
Employees – for those with fewer than 250 employees.
SSP – you will be entitled to reclaim the SSP that you pay from Day 1 for people with a Covid-19 related absence – there are rules on what qualifies which need to be checked before paying – the mechanism has yet to be made clear but it will probably be through the “normal” PAYE process.
Coronavirus Job Retention Scheme
This is open to ALL businesses. It is support to help with the pay of employees who would be at risk of being laid off as businesses struggle to continue.
The essence is this – those employees go into furlough – they do not work, but they maintain their position as employees. There may be a need for a variation in contract – your HR adviser should be able to help with this – or there may be further guidance coming online. The employees should be advised of their status.
For these employees you will receive 80% of their wages to continue to support you to pay them. Details are yet to be put together but it may relate to payments made between 1 March and 31 May and may be based on what has been paid in respect of February.
What do you need to do now?
Decide how your business is to operate over the next few months – for some it’s obvious – eg bars, gyms etc are closed – but for others there may be alternative ways of operating eg pubs offering takeaway / delivery services.
So is it closure or is it a different offer with a different staffing structure?
Decide who you are putting on furlough – which staff will not be needed during this period.
Inform your staff. Seek HR assistance with the documentation or there are examples online. Think carefully about what period it is for – the support is until 31 May so that may be the first review point or you may select to review every four weeks.
80% of their wages will be reimbursed to the business subject to a cap of £2,500 per employee per month.
The next decision you need to make is whether you will pay 100% of normal wages. This will depend on what your cash flow looks like taking into account any grants in and any reduced costs if you are not trading eg shutting up premises and reducing overheads as far as possible. Consider also any business loan holidays that may be taken.
Inform your payroll provider of your decisions – who, and what percentage you will be paying.
These providers should be able to provide you with information of the impact of your decisions – remember that if you are paying less then less will be deducted in terms of PAYE, NI and pension contributions so your employee may be affected less in cash terms than you may imagine.
Give your employees the following link which provides information about what else they might be entitled to. Link here.
Coronavirus Business Interruption Loan Scheme
This should be available from 23 March – you will need to produce a business plan based on the reliefs available above – speak to your bank and get some guidance. We can help with your business plan. Link here.
Disclaimer: this is our interpretation based on the information available and may be subject to revision so please check before acting upon it March 2020