COVID-19: Weekly UK Public Affairs Round-up
United Kingdom | 7th August 2020
The UK Government has paused lockdown easing for at least a fortnight following an uptick in virus cases in pockets of the UK. As similar trends are witnessed around the world, mandatory quarantine has been re-imposed on arrivals to the UK from Belgium, Andorra and The Bahamas. Elsewhere, the Home Affairs Committee has criticised the Government’s border policy in the early days of the pandemic, as the Government continues to consider measures to prevent a second wave in the latter part of the year.
Prime Minister postpones further lockdown easing
31st July: On Friday afternoon last week, the Prime Minister, Boris Johnson, announced a delay in the UK’s easing of coronavirus restrictions in England. In a press conference alongside Chief Medical Officer Chris Whitty, Johnson announced the “squeezing of the brakes” on the further opening up of high-risk sectors of the economy. This follows data from the Office for National Statistics (ONS), estimating that daily new infections now stand at 4,900, up from around 3,000 on 14 July and 2,000 per day at the end of June.
The postponement affects a number of sectors, including sports and the arts. Indoor theatre performances will not resume according to the anticipated timeline, pilots of crowds in sports centres will not take place, and wedding receptions of more than 30 people will continue to be prohibited. Face coverings are to be made mandatory in a wider array of indoor settings including museums, cinemas and places of worship, which will be enforceable from 8th August. The rulings on face coverings will be enforced by a greater police presence.
However, Johnson also emphasised that a 100-fold increase in testing capacity and improved availability of PPE puts the UK in a much better position to deal with a rise in transmission rates and hospital additions than earlier in the year. For these reasons, the scheduled pause to shielding advice from 1st August has been applied as envisaged and advice to employers regarding safety in the workplace remains unchanged.
Further countries removed from travel corridor
6th August: On Thursday, the Government announced that Belgium, Andorra and The Bahamas have been removed from list of travel corridors of quarantine-exempt travel for England. This follows data from the UK’s Joint Biosecurity Centre and Public Health England showing a significant increase in confirmed cases in the countries. Quarantine for arrivals travelling from Spain and Luxembourg, reimposed in recent weeks, remains in force. The Government is keeping its travel corridor list under review as it attempts to minimise the risk of COVID-19 transmissions from abroad, whilst reopening the tourism sector both at domestically and overseas. Conversely, Brunei and Malaysia have been added to the government’s travel corridor list, following a decrease in confirmed cases of coronavirus.
Further Details of Job Retention Bonus Revealed
31st July: The Government revealed further details on which employees will be eligible for the new Job Retention Bonus, which will see businesses receive a one-off payment of £1,000 for every previously furloughed employee that remains employed at the end of January 2021. The criteria include a requirement that the previously furloughed employee must be earning at least £520 a month on average between November and the end of January 2021. The bonus system, which was announced on 8th July, has been introduced to encourage employers to keep on staff, as the government “flexibly and gradually” winds down its furlough scheme, which was introduced in March to prevent mass redundancies as the UK entered lockdown.
Home Affairs Committee criticises COVID-19 response
5th August: The House of Commons Home Affairs Committee has released a new report criticising the UK’s border measures during the Covid-19 pandemic, labelling the introduction of quarantine rules as late as in June as a “serious mistake”. The report states that stricter measures and quarantine restrictions on arrivals could have slowed the crossborder transmission of the virus. However, the Committee supports the decision of the UK Government to allow British Citizens to return home by keeping borders open. This builds on increased scrutiny of the Government’s handling of the pandemic, as speculation grows around the possibility of a second national lockdown in the coming months.
- 6th August: The Northern Ireland Education Minister set out revised plans for the reopening of schools, which will return to normal patterns of operation and attendance from the week beginning 31st August.
- 5th August: Welsh Ministers announced a £800 million stabilisation package for NHS organisations across Wales to prepare for the anticipated challenges that winter will bring for the spread of COVID-19.
- 5th August: Local restrictions were announced for the city of Aberdeen in Scotland, following the increase of COVID-19 cases identified in the community. Measures include the closure of bars and restaurants, as well as restrictions on indoor meetings.
- 3rd August: The Scottish Health Secretary announced that the social care sector will receive up to £50 million further additional funding to help meet additional costs related to coronavirus, which will be allocated to Integration Joint Boards (IJB).
- 1st August: There is speculation that the Government will introduce a new shielding programme in the coming weeks designed to mitigate the impact of a second wave of the virus, following pausing of the scheme on 1st August.
- 3rd August: The Government has announced that millions of two new COVID-19 tests are to be deployed to hospitals, care homes and laboratories to increase the UK’s testing capacity before winter, with both tests able to deliver results in 90 minutes.
- 31st July: The Government published the latest, UK-wide estimated COVID-19 transmission rates that showed the ‘R estimate’ to be “between 0.8-0.9” nationwide, with a transmission rate between -1% to -4% that “means the number of new infections is shrinking by between 1% to 4% every day.
|7 day-rolling average||Peak (14th April)||30th July||6th August|
Summary of UK COVID-19 Business support schemes
The following rolling list of UK government business support measures announced in response to the Covid-19 pandemic is updated weekly and is accurate as of Thursday 6th August.
Starting in March, the UK Government has implemented a series of economic interventions aimed at supporting employees, employers and businesses through the uncertainty and potential loss of income resulting from the Covid-19 pandemic, and the restrictions on business activity as a result. Some of these have been revised and extended since being announced, most recently following the Chancellor of the Exchequer’s speech to the House of Commons on 8th July.
An official web portal with details on eligibility and how businesses can apply for support remains open by the Government.
Employment retention measures
Coronavirus Job Retention Scheme: Employers can claim 80% of their usual monthly wage costs for furloughed employees, limited to £2,500 per individual per month, plus the associated Employer National Insurance and minimum automatic enrolment employer pension contributions. Claims can be made to cover the period 1st March – 31st October 2020. From August, furloughed workers will be able to work part-time, with employers sharing salary costs with the Government. Amendments to the scheme announced on 29 May include the following: From August, employers will begin paying National Insurance and pension contributions and the taxpayer contribution will remain at 80 per cent; By September, employers will be expected to begin paying towards wages, with taxpayers contributing 70 per cent of the grant and employers 10 per cent; Throughout October taxpayers will contribute 60 per cent and employers the remaining 20 per cent. 31 July is the last day that you can submit claims for periods ending on or before 30 June. The current Coronavirus Job Retention Scheme will end in October.
Jobs Retention Bonus: The Government will pay employers a £1,000 bonus per employee if they bring someone back to work who was furloughed, on the condition that they are continuously employed through to January. The employee must be paid at least £520 per month on average, from November to the end of January, which is the equivalent of the lower earnings limit for national insurance contributions. Further details on the eligibility criteria can be found here.
Coronavirus Job Retention Scheme: Employers can claim 80% of their usual monthly wage costs for furloughed employees, limited to £2,500 per individual per month, plus the associated Employer National Insurance and minimum automatic enrolment employer pension contributions. Claims can be made to cover the period 1st March – 31st October 2020. From August, furloughed workers will be able to work part-time, with employers sharing UK Business Support Measures salary costs with the Government. Amendments to the scheme announced on 29 May include the following: From August, employers will begin paying National Insurance and pension contributions and the taxpayer contribution will remain at 80 per cent; By September, employers will be expected to begin paying towards wages, with taxpayers contributing 70 per cent of the grant and employers 10 per cent; Throughout October taxpayers will contribute 60 per cent and employers the remaining 20 per cent. 31 July is the last day that you can submit claims for periods ending on or before 30 June.
Coronavirus Statutory Sick Pay Rebate Scheme: The Government will refund eligible Statutory Sick Pay costs to all employers with fewer than 250 employees. This applies to any claim arising as a result of Covid-19, including precautionary self-isolation, and is limited to two weeks per employee. The online service for reclaiming coronavirus sick-pay scheme is now live, with HMRC guidance on eligibility found here.
Self-employed Income Support Scheme: Most self-employed workers will qualify for a grant of up to 80% of average monthly profits, capped at a maximum of £7,500 per month and covering three months’ earnings. The scheme will be open to those with trading profits no greater than £50,000 and who have experienced a loss in earnings as a result of the COVID crisis. At least half of a claimants’ income must come from self-employment, and they must be trading when an application is made, or would be except for COVID-19 disruption. Applications opened on 13 May 2020 and a final funding payment is accessible on 17 August 2020.
Business disruption financing measures
Coronavirus Commercial Financing Facility: The Bank of England’s new commercial financing facility is designed to support large companies of investment grade standing. It allows qualifying businesses to issue short-term debt of up to one-year maturity, which will be purchased by the Bank of England. The intent is to support short term liquidity, mitigating against cashflow disruption.
Bank of England Term Funding Scheme: The Bank of England has introduced a new Term Funding Scheme with additional incentives for small businesses financed by the issuance of central bank reserves. Over the next 12 months, the scheme will offer four-year funding of at least 5% of participants’ stock at interest rates at, or very close to, Bank Rate.
Coronavirus Large Business Interruption Loan Scheme: Intended to provide otherwise viable companies with access to short-term liquidity. It provides financing of up to £200m in the form of loans, overdrafts, or invoice and asset finance to businesses with an annual turnover of between £45m and £500m. Lending is for a maximum of three years. Individual lending limits apply, determined using the existing Enterprise Finance Guarantee. Lenders will be one of 40 accredited institutions, including all major high-street banks. To incentivise them to lend, the Government – through the British Business Bank - is guaranteeing 80% of the value of a loan. Companies that borrow over £50 million through the scheme will be subject to restrictions on dividend payments, senior pay and share buy-backs.
Coronavirus Business Interruption Loan Scheme: Intended to provide otherwise viable companies with access to short-term liquidity. It provides financing of up to £5m in the form of loans, overdrafts, or invoice and asset finance to businesses with an annual turnover below £45m. Lending is for a maximum of six years and the Government will pay the first 12 months’ interest. Individual lending limits apply, determined using the existing Enterprise Finance Guarantee. Lenders will be one of 40 accredited institutions, including all major high-street banks. To incentivise them to lend, the Government – through the British Business Bank - is guaranteeing 80% of the value of a loan. On 30th July, the Government announced an extension of the scheme to include smaller businesses which have less than 50 employees and a turnover of less than £9m.
Bounce Back Loan Scheme: Intended to support micro-businesses with short-term cashflow concerns as a result of the COVID crisis. Loans will be made available through accredited lenders to businesses with an annual turnover below £200,000 a year, capped at a maximum of 25% of that figure. The Government will act a guarantor for 100% of the loan, increasing the chance of acceptance and ensuring the loan doesn't need to be secured against personal assets. The Government will pay interest for the first year, with no repayments will be due during those 12 months.
Small Business Grant Funding: Individual grants of £10,000 will be made available through local authorities to businesses eligible for Small Business Rate Relief (SBRR) that already pay little or no business rates.
Trade Credit Insurance Guarantee: Businesses with supply chains that are reliant on Trade Credit Insurance may apply for support from the Government. The Government will now temporarily guarantee business-to-business transactions currently supported by Trade Credit Insurance, ensuring the majority of insurance coverage will be maintained across the market. The Trade Credit Insurance (TCI) guarantee will cover over £171 billion business activity currently insured and the transactions between around 13,000 suppliers and 650,000 buyers.
Tax relief measures
Temporary VAT reduction for hospitality sector: The Government has introduced a temporarily reduced VAT rate of 5%, down from 20%, for certain supplies of hospitality, hotel and holiday accommodation, and admissions to certain attractions. The reduction will be introduced from 15th July, and last until 12 January 2021.
VAT Deferral: The Government has deferred VAT payment demands for the second quarter, meaning that no business will be required to pay outstanding VAT until the 30th of June. Businesses will have until the end of the year to reconcile any accumulated tax debts. Any deferred VAT payments should be paid on or before 31st March 2021.
Deferral of Self-Assessment Payment: Income tax payments due under Self-Assessment on 31st July 2020 will be deferred until 31st January 2021. All self-employed individuals will be eligible.
Temporary Changes to the Statutory Residence Test: For the period between 1st March and 1st June 2020, any period spent in the UK by individuals working on COVID-19 related activities will not count towards residence tests that potentially bring global earnings within the purview of UK taxation. These changes are designed to allow skilled individuals to come to the UK and help respond to the pandemic. The guidance has not been updated since April.
Support for Businesses Paying Tax: HMRC have established a dedicated COVID-19 helpline to support businesses and self-employed individuals unable to meet tax demands. Bespoke Time to Pay arrangements will be offered to those businesses with a legitimate need and support their recovery while navigating temporary financial challenges. HMRC will also waive late payment penalties and interest where a business experiences administrative difficulty due to COVID-19.
Targeted support measures
Eat Out to Help Out Scheme: The Government will support the restaurant industry by offering a subsidized 50% discount on eat-in food and non-alcoholic drink bills for customers eating between Monday and Wednesday during August, up to a £10 limit. Money will then be claimed back by the restaurant from the Government. Applicants are eligible if they sell food for immediate consumption on the premises; provide an own dining area or share a dining area with another establishment for eat-in meals; and were registered as a food business with the relevant local authority on or before 7 July. Those eligible can register for the scheme from 13 July 2020, and registration closes on 31 August.
Apprentice and Trainee Bonus Scheme: The Government will provide financial incentives for employers to hire young employees, offering businesses a cash bonus of up to £2,000 per apprentice employed and £1000 per trainee taken on. Further details will be announced in due course.
Future Fund: Targeted at fledgling UK businesses backed by private equity that have suffered from COVID-related disruption, the future fund will provide a convertible loan facility of £125,000 - £5m. To qualify, the company must have raised at least £250,000 in equity investment from third party investors in the last 5 years. The loan must be matched by new third-party investment and be used for working capital. Term length is for a maximum of 3 years, after which any outstanding debt will be converted into stock. The company must have half or more of its employees based in the UK or generate at least half of their revenue through UK sales. The scheme was launched on 20 May and will be open for applications until the end of September 2020.
Innovate UK Investment Fund: A £750 million fund for targeted support for R&D-focused small businesses is being made available through Innovate UK’s grants and loan scheme. The majority of the money has been allocated to support existing Innovate UK customers on an opt-in basis. However, grants or loans of up to £175,000 will be provided to approximately 1,200 businesses not currently in receipt of Innovate UK funding, provided they otherwise meet the criteria for Innovate funding. The first payments will be made by mid-May.
Cash Grant for Retail, Hospitality and Leisure: A cash grant of up to £25,000 will be made available to businesses in England operating in the retail, hospitality and leisure sectors with a rateable value of between £15,000 and £51,000. Businesses in these sectors with a rateable value of under £15,000 will receive a grant of £10,000.
Business Rates Holiday for Retail/Hospitality/Leisure venues: A 100% business rates holiday will be applied from 1st April for a period of one year to all retail, hospitality and leisure venues, including shops, pubs, restaurants and theaters. There is no limit to rateable values.
Business Rate Holiday for Nurseries: Nurseries in England will not have to pay business rates for the 2020-21 tax year. This will apply to properties occupied by providers on the Government’s Early Years Register and are used for the provision of nursery education.
Support Package for Charities: Frontline charities across the UK will benefit from a £750 million package of Government support to ensure they can continue their work during the coronavirus outbreak. The government has also confirmed that charities can access many of the measures announced to support businesses more broadly.
Reopening High Streets Safely Fund: Councils across England will receive access to a new £50 million fund to allow Local Authorities to help support practical and health & safety measures designed to facilitate the quick and safe reopening of non-essential high street and retail spaces in the near future. Councils will also be able to use this money to develop local marketing campaigns to explain the changes to the public and reassure them that their high streets and other commercial areas are safe.
Business Support Checker Tool: The UK Government have released a new “support find tool” on the form of a self-assessed questionnaire for businesses and self-employed people across the UK, to allow them to quickly determine what financial support is available to them, to handle the consequences of the pandemic.
Extension Period on Filing Accounts: Businesses can apply for an additional three months to file accounts with Companies House to help avoid penalties as they deal with the impact of COVID-19. Applications can be made through a fast-track online system.
Coronavirus Business Support Hub: Businesses can now access a new online portal which aims to compile “key information for businesses including on funding and support, business closures, your responsibilities as an employer and managing your business during coronavirus. The hub also includes information for self-employed people and sole traders.”
Business Interruption Insurance: The Government has confirmed that the business impact of Government measures to slow the spread of the COVID-19 virus provides sufficient grounds for businesses to claim on their insurance where they have appropriate business interruption cover in place.
Workplace Skills Learning Platform: The Government has introduced a new online platform that gives people access to free, high-quality digital and numeracy courses to help build up their skills, progress in work and boost their job prospects. The platform provides individuals with free access to several courses designed to boost workplace skills as individuals continue to socially distance at home.
Protection for commercial tenants: The Government has introduced temporary measures to safeguard commercial tenants from aggressive debt recovery actions. Statutory demands and winding up petitions issued to commercial tenants have been temporarily voided and new protections introduced in the use of Commercial Rent Arrears Recovery. Landlords have been asked to work collaboratively with businesses unable to meet rent demands.
Flexible Insolvency rules: Changes will include allowing businesses undergoing restructuring to continue trading and receive supplies. There will also be a temporary suspension of wrongful trading provisions for company directors to remove the threat of personal liability, which will apply retrospectively from 1st March.
Gender Pay Gap Reporting Suspension: The Government Equalities Office has suspended requirement for businesses to report gender pay gap data for the reporting year 2019/20.
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