- Communicate and reassure all stakeholders
- Be positive and lead your team
- This is part of a cycle and business will pick up again maybe in as little as 90 days
- Don’t wait, adapt your business to make the best of the circumstances now
- Cut back unnecessary expense and spend more on marketing and sales
- Make the most of low interest rates and refinance or extend credit
- Consider part-time working or temporarily changing what your employees are doing to avoid redundancies
- Plan for as many people as possible to work from home
- Step up delivery so customers don’t need to come to you
- Increase marketing and especially online marketing
- Incentivise and ask your existing customers to buy more from you
Government Support
To assist business owners, the government has announced that it will provide support to ensure the impact of Corona virus is minimised. Click this link to read more about the government support.
Loans
A Corona virus Business Interruption Loan Scheme has been introduced. Businesses with a turnover of less than £41 million can apply for a loan of up to £1.2 million, with the government covering up to 80% of any losses with no fees. The Corona virus Business Interruption Loan Scheme (CBILS) temporarily replaces the Enterprise Finance Guarantee Scheme and will be provided by the British Business Bank through accredited lenders. To apply visit this website and follow the information provided.
Covering Sick Pay
For businesses with fewer than 250 employees, the cost of providing 14 days of statutory sick pay per employee will be refunded by the government in full. This will provide 2 million businesses with up to £2 billion to cover the costs of large-scale sick leave. Corona virus statutory sick pay is expected to be in the form of a refund. The Treasury says that it is “working with employers over the coming months to set up a repayment mechanism as soon as possible for employers reclaiming statutory sick pay”.
Corona virus help for self-employed
For the self-employed not eligible for SSP, 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 corona virus or self-isolating in line with advice from day one of sickness, rather than day eight.
For more information about corona virus government statutory sick pay, go to the Department for Work & Pensions website here.
For further advice regarding sick pay and how best to support your employees should they self-isolate, the ACAS website has issued the following information – https://www.acas.org.uk/coronavirus
Small Business Rates Relief
There is also a £3,000 cash grant being made available to 700,000 of our smallest businesses, which will be delivered by Local Authorities, and worth a total of £2 billion. Your local council will have further information on this as the scheme is rolled out.
The government is also temporarily increasing the business rates retail discount in England to 100% for 2020-21 for properties below £51,000 rateable value. Nearly half of all business properties will not pay a penny of business rates. This will also be implemented through your local council. If you already receive the current business rates retail discount, you will receive notification of the changes in due course. If you currently don’t receive any relief, you can check with your Local Authority for your eligibility. You can find your local authority here .
More information is set to be announced in the coming weeks and further details on how to apply. In the meantime, businesses with immediate concerns are advised to contact HMRC’s Business Support Helpline
A helpline has also been set up to help businesses and self-employed individuals with outstanding tax liabilities receive support with their tax affairs. Through this, businesses may be able to agree a bespoke ‘time to pay’ arrangement. If you are concerned about being able to pay your tax due to COVID-19, call HMRC’s helpline on 0800 0159 559.
Key Contacts
Talk to your insurer about what happens if you have to close your business.
Think about how your business insurance will work if your business closes due to an outbreak of the virus. Check your policy wording: Standard policies may not include any protection if your business suffers due to an outbreak of disease, regardless of circumstance.
Firstly, you need to check your policy, or confer with your broker to see if you have Business Interruption cover in your commercial insurance policy. Business Interruption insurance covers the income that you lose after a disaster, and often comes up when discussing terrorism cover (for example, after the London Bridge attack, local businesses that were forced to close for a period of time would have been able to claim for revenue lost under this clause).
Once you have confirmed that you have Business Interruption cover, you will need to check whether you have an extension for “notifiable diseases”. If you have this in your policy wording, you will need to reach out to your broker/insurer to confirm whether coronavirus is covered. The UK Government has declared COVID-19 a notifiable disease. Holyrood has declared coronavirus a notifiable disease in Scotland.
If it isn’t, you may be able to ask for it to be added by your insurer, but they are within their rights to refuse, or to ask for an increased premium.
Talk to your bank about finance options
Talk to your bank about financial help if needed, to tide you over if your business gets into difficulty.
The UK Government and Bank of England have made billions of pounds available for domestic banks across the UK to help small businesses in this position. Banks struggled to use this in the 2008 crash, but they are in a much stronger position, now. The British Business Bank is setting up a Coronavirus Business Interruption Lending Scheme (see above) which will provide your lender with a government-backed 80% guarantee against the outstanding facility balance, which should enable a ‘no’ credit decision to become a ‘yes’.
In addition to considering new overdraft facilities, banks and finance providers should also be lenient on things like loan repayments and may agree to mortgage holidays for commercial as well as residential premises. The Bank of England cut interest rates from 0.75% to 0.25% last Thursday.
Talk to your customers about payment
Small businesses or the self-employed with invoices issued should use this moment to chase for instant payment. You should also immediately issue invoices for work done, so they can be processed while finance teams in large businesses are operating. This isn’t just for large customers; everyone should be encouraged to pay an invoice, immediately.
Talk to the Government about business support
The UK Government’s Department for Business, Energy and Industrial Strategy has launched a dedicated business support helpline, where small business owners in England can get advice on how to minimise/cope with the impacts of coronavirus. The number is 0300 456 3565. Lines are open Monday to Friday, 9am to 6pm. You can also email enquiries@businesssupporthelpline.org.
Talk to HMRC about more time to pay your tax
HMRC is going to be key in this crisis. It has set up a dedicated phoneline for Coronavirus related challenges, to help small businesses unable to pay their taxes on time (Corporation tax, income tax, PAYE, VAT) with options to defer or delay payment.
Known as ‘Time To Pay’, this is a vital service. Around 2,000 staff work on their helpline, and we have already had small businesses report that they have waited for less than 2 minutes before speaking to someone. The helpline number is 0800 015 9559 and lines are open Monday to Friday, 8am to 8pm and on Saturday, 8am to 4pm.
HMRC will also waive late payment penalties and interest, but you should make every effort to contact HMRC immediately.
Talk to HMRC about Statutory Sick Pay costs for your employees
The UK Government has agreed to cover the costs of 14 days of Statutory Sick Pay (SSP) per employee, for those off work due to coronavirus, in small and medium-sized firms. This may well come via HMRC BUT this is not yet confirmed. However, we do know:
This will cover all companies up to 250 employees as at 28 February 2020
This will come into effect from day one of sickness, rather than day four
Employers will be able to reclaim this expenditure; this is a rebate – they are still working on the most appropriate repayment mechanism
Employers should maintain records of staff absences and payments of SSP, but employees will not need to provide a GP fit note
This will kick in the day after the regulations on the extension of Statutory Sick Pay to those staying at home comes into force (This is expected to be announced week commencing 16 March 2020)
Talk to HMRC about Employment Allowance help
Small employers with a National Insurance bill of £100,000 or less will continue to qualify for the Employment Allowance. This will be expanded from April to £4,000 per small business, enough, for example, to fund the National Insurance employer contributions in total for four employees on the National Living Wage.
In your payroll software, to claim this make sure put ‘Yes’ in the ‘Employment Allowance indicator’ field next time you send an Employment Payment Summary (EPS) to HMRC. For those without software that use HMRC’s Basic PAYE Tools, on the home page make sure you amend your employer details to include ‘Yes’ in the ‘Employment Allowance indicator’ field.
Talk to your local authority about your Business Rates
Local authorities are responsible for collecting and administering business rates.
The UK Government announced at the Budget that small businesses with a rateable value of between £12K and £51K in England, across retail, hospitality and leisure sectors will see their relief increase from 33% to 100%, for one year. Note that the relief has been expanded to more sectors, but not all. Pubs will also get a £5,000 discount. In total, 900,000 businesses will now not pay a penny in business rates.
700,000 businesses that already qualify for Small Business Rate Relief or Rural Rate Relief will be given a £3,000 cash grant. If you have already received a business rates bill – it is important to pay it, with a refund being issued retrospectively. More detail is due to be announced by 20th March. It is worth approaching your local authority to check on what they are planning.
Talk to your landlords about a rent holiday
Guidance for employers
Current government advice is that the overall risk to the public in the UK remains moderate.
The overall risk to employees in contracting Covid-19 through attending their place of work in the UK is very low. However, the following guidance to help you manage your staff and your responsibilities to them at this time. Please note this:
What are my duties as an employer?
Employers have a duty under health and safety legislation to take steps to ensure the health, safety and welfare of all their employees, so far as reasonably practicable, including those who are particularly at risk for any reason. Employees also have a duty to take reasonable care of their own health and safety and that of people they work with. They must cooperate with their employer to enable it to comply with its duties under health and safety legislation. Employees who refuse to cooperate, or who recklessly risk their own health or that of others in the workplace, could be disciplined where this is appropriate. Where, for example, employees attend work but the employer reasonably believes the employee has symptoms that would require them to self-isolate in accordance with current government advice (i.e. where they have a new persistent cough and/or high temperature), it is likely that the employer has a duty of care towards other staff to require the employee displaying those symptoms to stay at home and self-isolate for a period of 7 days. Employees will be entitled to SSP in this scenario under new temporary SSP Regulations (see below). Alternatively, where employees are fit enough to carry out some work whilst self-isolating and it is practicable for them to do so, employees would be paid their normal wages for the period they are carrying out work.
Individuals in self-isolation must follow the published advice from Public Health bodies on how to self-isolate effectively. This includes, not having visitors to their home and requesting that friends, family or delivery drivers drop off deliveries at the doorstep.
Employers are advised to keep an eye on the current government advice and to refer employees to it where they may be concerned about their individual risk. The advice is reviewed by the government on a daily basis:
https://www.gov.uk/guidance/wuhan-novel-coronavirus-information-for-the-public
The government has produced guidance for employers, which can be accessed here:
What is the Government and Public Health Advice on Self-isolation?
Previous government advice was that individuals returning from category 1 areas/countries should self-isolate for a period of 14 days from their return even where symptomless, with those returning from a category 2 area being required to self-isolate for 14 days only where they develop symptoms of the coronavirus. This advice has been replaced by the current advice on self-isolation:
Anyone who develops a high temperature (37.8 degrees and above) and/or a new, continuous cough must self-isolate for 7 days. They must stay at home and avoid all but essential contact with others for 7 days from the point of displaying those symptoms, to slow the spread of infection. This was changed on 16th March to 14 days for everyone in the household of the affected person.
Individuals do not need to call NHS 111 to go into self-isolation. Where their symptoms worsen during home isolation or are no better after 7 days, they should contact NHS 111 online at 111.nhs.uk. For individuals without internet access, they should call NHS 111. For a medical emergency they should dial 999.
In the coming weeks, the government will be introducing further social distancing measures for older and vulnerable people, asking them to self-isolate regardless of symptoms.
Do I have to pay Statutory Sick Pay if employees are required to self-isolate?
Employees who develop symptoms of the coronavirus or symptoms which require self-isolation will of course be unfit for work. They will be entitled to SSP subject to meeting the qualifying criteria.
Temporary Reform of the SSP Rules
In response to the coronavirus outbreak, new Regulations known as The Statutory Sick Pay (General) (Coronavirus Amendment) Regulations 2000 came into force on 13 March 2020. These will remain in force for a period of 8 months. These Regulations amend the Statutory Sick Pay (General) Regulations 1982 and provide that:
Individuals who self-isolate to prevent infection or contamination with coronavirus disease in accordance with guidance published by Public Health England, NHS National Services Scotland or Public Health Wales (i.e. advice from the public health bodies in Great Britain) and are unable to work for that reason will be entitled to SSP.
In other words, this extends the current entitlement to SSP to those employees who are self-isolating for 7 days due in accordance with Public Health advice to having a fever and/or new persistent cough. These Regulations have been passed in order to encourage self-isolation and to minimise the risks to public health arising from coronavirus disease.
It was announced in the Budget on 11 March 2020 that further reforms to the SSP rules will be introduced as follows, although it is not yet known when these will come into force:
The Government will reimburse small and medium employers (i.e. those employing fewer than 250 employees, as determined by the number of people they employed as of 28 February 2020) any statutory sick pay they pay to employees for the first 14 days of sickness as a result of coronavirus.
Under the new rules, employers should maintain records of staff absences, but should not require employees to provide a GP fit note.
As the Temporary Threshold Scheme which previously permitted small businesses to reclaim SSP from the Government was abolished in 2014, the Government will set up a new repayment mechanism for employers for reclaiming SSP in due course.
For individuals who are not entitled to SSP, such as the self-employed and those that fall below the Lower Earnings Limit, a ‘new style’ Employment and Support Allowance through the welfare system will be payable for people directly affected by coronavirus or who are self-isolating according to government advice, from the first day of sickness or self-isolation.
Contractual Sick Pay
Employers that offer enhanced contractual sick pay over and above SSP rates, should consider whether or not they will revise their contractual sick pay eligibility criteria for contractual sick pay or exercise discretion to include employees who are self-isolating as a result of coronavirus but not unwell, or whether to pay SSP only in this circumstance. Employers considering amending their enhanced sick pay schemes as a financial measure (including on a temporary basis) in view of the likely increase in staff sickness levels due to coronavirus and the new Government guidance on self-isolation should bear in mind the following points:
Employers with discretionary sick pay schemes whereby the employer operates the SSP scheme but may exercise their discretion to pay more than SSP in any particular case must exercise their discretion fairly and reasonably and not arbitrarily or capriciously. In particular, to maintain mutual trust and confidence, the employer should ensure consistency in their decision making and must not discriminate against a particular employee because of their disability.
Employers with contractual (enhanced) sick pay schemes can only lawfully change the criteria for payment (including on a temporary basis during the coronavirus outbreak) with employees’ agreement, or in accordance with any contractual flexibility clause. This means that a failure to make a payment in accordance with the rules of the scheme would amount to a breach of contract and, depending on whether the breach is sufficiently serious or not, it may entitle the employee to claim constructive dismissal (in the latter case, subject to the employee having at least 2 years’ service, or 1 years’ service in Northern Ireland).
Should employees wear face masks to protect themselves from infection?
Employees are not recommended to wear facemasks (also known as surgical masks or respirators) to protect against the virus other than in health care settings or where protective face masks might help employees working in particularly vulnerable situations. Face masks are only recommended to be worn by symptomatic individuals (advised by a healthcare worker) to reduce the risk of transmitting the infection to other people.
Public Health bodies recommend that the best way to reduce any risk of infection is good hygiene and avoiding direct or close contact (closer than 2 metres) with any potentially infected person.
Any member of staff who deals with members of the public from behind a full screen will be protected from airborne particles.
Face masks play a very important role in clinical settings, such as hospitals but there’s very little evidence of widespread benefit from their use outside of these clinical settings. Facemasks must be worn correctly, changed frequently, removed properly and disposed of safely in order to be effective.
The advice from the World Health Organisation states that if you are healthy, you only need to wear a mask if you are taking care of a person with a suspected coronavirus infection.
Are employees entitled to pay if employers require them to stay away from work?
Employers may choose to go further than the advice from the Public Health bodies and, as a precautionary measure, ask require employees to stay away from work when they are not sick or are not self-isolating in accordance with current Public Health advice. In those cases, employers will need to pay employees their normal salary for this absence. This is because the absence is at the employer’s request and is not sickness absence. Alternatively, employers may choose to ask employees to work from home if this is an option in which case, of course, they would receive their usual pay.
How should I respond if employees refuse to work?
Employees may be anxious about the risks of being exposed to the virus due to travelling to work on public transport or by attending the workplace. They may even refuse to attend work on this basis. Whilst their absence in this circumstance is likely to be unauthorized, again, unless there is clear evidence that the employee’s concerns are not genuinely held, the best approach would be to assuage employees’ anxieties by referring them to published advice from Public Health bodies. It is unlikely to be reasonable to treat absences from work in those cases as unauthorized or as a disciplinary matter unless the employer has reasonable grounds for believing, based on compelling evidence, that they are using the virus as an excuse not to attend work.
Employers may choose to be cautious about permitting those employees to work from home or otherwise stay away from the workplace where they do not wish to set what employees may construe as “a precedent” by doing so; and where there is no good public health reason for them to stay away from the workplace.
What about employees who are unable to attend work due to school closures or due to dependents self-isolating?
The government has now moved to the “delay” phase of its action plan to help slow down the onset of an epidemic. The government announced that during this stage it may consider closing schools, encouraging greater home working and possibly reducing the number of large-scale public gatherings. The government has not yet recommended the closure of schools or other measures. However, if schools are closed, this will impact on childcare arrangements and employees’ ability to attend work. In this scenario, it is also likely to be more difficult for employees to find replacement childcare cover. Elder care arrangements may also be adversely affected. The government’s new guidance on self-isolation, which has been implemented by schools, will also have a potential impact on childcare where children are required to self-isolate for 7 days and to not attend school where they have a new, persistent cough, or a fever.
Section 57A of the Employment Rights Act 1996 gives employees the right to a reasonable amount of unpaid time off work because (amongst other reasons) of the unexpected disruption or termination of arrangements for the care of a dependant. This statutory provision may apply where employees have children they need to arrange childcare for because their child’s school is closed, or to arrange care for their child or another dependant if they’re sick, or need to go into isolation. An employee may complain to an Employment Tribunal where their employer has failed to permit them to take time off under this provision. Employees also have the right not to be subjected to any detriment for reasons relating to time off for dependants and any dismissal on these grounds is automatically unfair, regardless of the length of the employee’s employment.
As the statutory regime does not apply to planned time off to care for dependants, it is unlikely to apply where school closures are known about in advance (for example, it may only apply to the first couple of days of a school closure, whilst longer-term childcare arrangements are put in place). Also, the statutory right is to a “reasonable” amount of time off only, so it may not extend to a 14-day self-isolation period, or longer period of school closure.
However, the Government announced at the Budget on 11 March 2020 that SSP will be extended to those caring for others who self-isolate as a result of coronavirus (presumably for up to 14 days), such that employers would treat this as sick leave. Details of this have not yet been published and the temporary reform to the SSP rules has not yet been enacted.
Where this is practicable, employers should be flexible by permitting affected employers to work from home, or to alter their working hours on a temporary basis in the event of school closures or a temporary breakdown in existing childcare arrangements or arrangements for care of elderly dependants. Alternatively, the employer may consider agreeing with the employee agree a period of unpaid leave or paid annual leave to cover the time off work.
Can I use Lay Offs and Short Time Working?
Some businesses have been affected by a downturn in work caused, for example, by customers cancelling travel and hotel bookings, or by current or potential customers “social distancing” as a result of public anxiety around contracting the virus. At the Budget on 11 March 2020, the Government announced measures it will introduce to support businesses that experience increased costs or disruptions to their cashflow as a result of coronavirus, including a Coronavirus Business Interruption Loan Scheme and a dedicated HMRC helpline for those who need a deferral period on their tax liabilities.
Lay-offs and short time working can be put in place as a useful way of handling temporary work shortages without having to resort to redundancy. However, employers can only lawfully take this action to avoid potential unlawful deductions from wages claims or breach of contract claims where employees agree to being laid off or kept on short-time working, or it is provided for in the contract (e.g. the contract contains a “lay-off” and/or “short-time working” clause).
What about Variations of Contract?
Businesses affected by a downturn in work may also consider putting in place other temporary measures to avoid the need for redundancies, such as introducing a temporary reduction in pay, working hours, or removing/reducing certain contractual benefits. Employers will need to consult with staff to obtain their agreement to these measures in the absence of any relevant contractual flexibility clauses or short time working clauses.
On the other hand, there is likely to be a significant increase in workload for staff that are able to continue working during the coronavirus outbreak, particularly in certain sectors such as healthcare and social care. Employers need to consider what measures they can put in place to support those staff in helping them to manage increased workloads. In the absence of existing contractual overtime provisions, employers will need to seek staff agreement to working overtime.
What general measures can I take in the Workplace?
Most employers have already placed restrictions on work-related travel. Employers should continue to monitor the latest travel advice from the Foreign & Commonwealth Office as this advice is rapidly changing.
The UK government is not currently advising companies that working from home is to be encouraged beyond existing home working patterns, although some employers have put this in place as a risk control measure.
In addition to informing staff of the new government requirements around self-isolation, the best way to protect employees and others from infections like coronavirus is to remind staff (such as through written notices displayed in the workplace) to wash hands frequently with soap and water for at least 20 seconds and to use an alcohol-based sanitiser gel where this is not available; as well as carrying tissues and using them to catch coughs and sneezes, and disposing of used tissues in the bin straight away.
