Coronavirus Business Legal Help

What reliefs are available for small businesses?

There are several reliefs available for small businesses based in England.

Nurseries and businesses in the retail, hospitality and leisure sectors (which are based in England) may be eligible for a business rates holiday. For more information on eligibility, visit the GOV.UK guidance on the Expanded Retail Discount and Nursery Discount.

All businesses and self-employed people in financial distress and with outstanding tax liabilities may also be eligible to receive support with their tax affairs through HMRC's Time to Pay Service. Support is arranged on a case-by-case basis and is tailored to individual circumstances. If you have missed a tax payment or you might miss your next payment due to Coronavirus (Covid-19), you can call HMRC's dedicated helpline: 0800 024 1222. If you're worried about a future payment, you can call HMRC nearer the time.

On 5 January 2021, the Government announced a one-off top-up grant for retail, hospitality and leisure businesses worth up to £9,000 per property, to help them through to the spring. These one-off payments will be granted to closed businesses as follows:

• businesses with a rateable value of £15,000 or under: £4,000 

• businesses with a rateable value between £15,000 and £51,000: £6,000

• businesses with a rateable value above £51,000: £9,000 

 

What loans are available to support small businesses?

The Recovery Loan Scheme has replaced the Coronavirus Business Interruption and Bounce Back Loan schemes. Eligible businesses will be able to borrow between £25,000 and £10 million to help support recovery and drive growth. The scheme opened on 6 April 2021 and is expected to come to an end in December 2021. Eligibility criteria for the loan are that the:

• business must be trading in the UK

• business has been affected by the pandemic 

• business would be viable were it not for the pandemic 

• business is not in insolvency proceedings

 

What is the Kickstart Scheme?

The Kickstart Scheme is a fund intended to subsidise six-month work placements for people on Universal Credit aged between 16 and 24, who are at risk of long-term unemployment.

Under the scheme, the Government will cover the cost of 25 hours' work a week at the national minimum wage (£8.20 for those aged 21 to 24, £6.45 for those aged 18 to 20, and £4.55 for those under 18) for each ‘kickstarter’ job. Employers can top up these payments if they wish. For more information on the Scheme, and eligibility requirements, read the GOV.UK guidance, Apply for a grant through the Kickstart Scheme.

You can now apply for the Scheme online. The Scheme is expected to run until December 2021, but the government retains the option to extend it where necessary.

 

What support is available for the arts?

In 2021 the Government announced a £700 million of spending will be allocated to support the arts, culture and sporting institutions as they reopen.

 

VAT cuts

The Government has announced that from 8 July 2020, VAT will be reduced to 5% (as opposed to the previous 20%) for tourism and hospitality businesses.

This VAT-cut will apply to a variety of businesses including: eat-in or hot takeaway food from restaurants, cafes and pubs, accommodation in hotels, B&Bs, campsites and caravan sites, attractions like cinemas, theme parks and zoos.

This VAT cut will last until 30 September 2021. After September rates will increase to 12.5% until March 2022 to help businesses adjust to paying standard rates of 20% again.

Is my business covered by my insurance policy?

If you have a business insurance policy that covers pandemics and government-ordered closure, you should be able to make an insurance claim against that policy. The government and insurance industry confirmed on 17 March 2020 that advice to avoid pubs, theatres etc is sufficient to make a claim.

Insurance policies differ significantly, so businesses are encouraged to check the terms and conditions of their specific policy and contact their providers. Most businesses are unlikely to be covered, as standard business interruption insurance policies are dependent on damage to property and will exclude pandemics.

Contact your insurance provider to check whether your business is covered. It might be that you would not be covered under current guidance, but could be covered if the guidance from the government changes or the situation escalates.

What policies should employers have in place now? 

Make sure you have adequate policies in place so that employees know how you are dealing with sickness, working from home and health and safety. You can make a health and safety policy, working from home (also known as a flexible working policy) and sickness policy with Rocket Lawyer. If you need to make redundancies or dismiss employees it is advisable to have these policies in place and to follow ACAS guidelines. Ask a lawyer for redundancy advice or make your Redundancy policy with Rocket Lawyer.

 

Can we insist on employees to self-isolate?

Employers have a duty to protect the health and safety of their workers. This could extend to insisting on self-isolation for a recommended period, particularly if individuals have returned from a high-risk area defined by the FCO, regardless of whether they are displaying symptoms. The decision to require self-isolation should not be discriminatory and should be carried out with the rationale of protecting the health and safety of the wider workforce. Staff may or may not be able to work from home during this period, depending on the extent of any symptoms and/or the nature of their role.

Requiring someone to self-isolate may be in breach of the employment contract, but if the rationale for such action is to protect the health and safety of the wider workforce and/or in response to UK government guidance, then the employer’s duty in respect of health and safety is likely to triumph.

 

Is an employer responsible for employees’ health and safety whilst they are working from home? 

An employer is responsible for protecting the health and safety of employees working from home. It’s good practice for the employees themselves to conduct a self-assessment of the risks associated with working from home. The assessment must identify the hazards that may harm those working without supervision and employers must find ways to manage these risks in order to comply with health and safety rules. 

Where the employee is a new or expectant mother, the employer must also account for risks to the child in addition to those to the mother. Where equipment is provided by the employer as part of the employee’s work, the employer is only responsible for the equipment supplied. 

Employers should provide appropriate training and supervision and keep in contact with employees regularly while they work from home. It is also crucial for employers to inform employees of their health and safety policies and employees must cooperate with their employers on these rules and report all employment-related hazards. Read Health and safety for employees working from home during the Coronavirus (COVID-19) crisis for more information. 

Create your Temporary working from home policy with Rocket Lawyer.

 

Should employees and workers work from home?

From 13 December 2021, workers should work from home rather than their normal physical workplace, wherever possible. All workers who cannot work from home should travel to work if their workplace is open. 

Where working from home is not possible, employers should ensure that the workplace is safe for staff (eg by requiring staff to wear face coverings, minimising visitors, using one-way systems and requiring frequent and thorough handwashing) and that they comply with any sector-specific guidance. For more information read the government’s guidance, Working safely during coronavirus (COVID-19).

Where a worker has Covid-19 symptoms (however mild) they should not leave their house to go to work. Instead, they should self-isolate and not return to work. 

From 14 December 2021, anyone who is double-vaccinated and comes into contact with a person with Coronavirus (regardless of variant) should take daily lateral flow tests for 7 days, rather than immediately self-isolating. Anyone who tests positive will need to self-isolate and take a PCR test to verify the results. You may, however, consider encouraging employees who share a household with someone who has tested positive for Coronavirus to work remotely where possible. 

Anyone who is not double-vaccinated and has been in contact with someone who has Coronavirus is required to self-isolate for 10 days.

In England, anyone infected with Coronavirus can stop self-isolating up to 3 days early if they test negative twice. This means that you will be able to end quarantine after 7 days instead of 10 by providing negative lateral flow results on day 6 and day 7. For more information, see the government’s guidance.

 

Can we require staff to be vaccinated?

While employers can adopt an Employee vaccination policy encouraging staff to be vaccinated where possible, employers cannot typically require employees or potential employees to be vaccinated (unless they work in a sector where a legal requirement has been introduced, eg care homes).

If employers wish for staff to get vaccinated, it is best to support them without forcing them to get the vaccine. If employers feel that it is important for staff to be vaccinated, they should speak to their staff and/or the recognised trade union to discuss what steps to take.

Any decision reached after such discussions, should be recorded in writing in, for example, a vaccination policy, and should be in line with existing Disciplinary and Grievance policies. Before adopting a vaccination policy, employers should consider:

• discussing the employer’s approach towards vaccines with their staff (eg whether vaccines will be required for staff returning to the workplace)

• that any incentives offered to receive the vaccination will not discriminate against staff members with protected characteristics (eg disability or belief) who have reasons for not having the vaccination

• inform staff members that travel for work, especially to high-risk countries (eg red list countries), that the vaccine will likely be necessary

• that any vaccination strategies must include exceptions for staff members who cannot get vaccinated (eg due to medical or belief reasons)

For more information, read Coronavirus (COVID-19) vaccinations in the workplace and How to record the Coronavirus (COVID-19) vaccination status of staff.

Do we need to pay employees if they are absent from work?

If an employee is prevented from working because they are genuinely unwell or sick, then the company's normal sickness policy should apply.

If you have asked your workforce not to come to work but to work from home, they should also be paid as normal.

Where an individual is not unwell but is prevented from working because they are, for example, in self-isolation, quarantine, or stranded abroad, or they have otherwise been advised to stay at home as a result of medical or UK government advice and are unable to work remotely, there is no legal right to be paid for the time off. However, ACAS and the Secretary of State for Health have advised such absence to be treated as sick leave under the company’s sick pay policy.

Statutory sick pay (SSP) will be payable to eligible workers, although the UK government has announced a series of measures to relax the ordinary rules in light of the Covid-19 outbreak. New legislation has been passed allowing SSP to be paid from the first day of absence (instead of day four) in certain circumstances. For this to be the case, an employee must be unable to work either because they have Coronavirus or because they are self-isolating and:

• they must be eligible for SSP

• their first day of sickness absence must be on/after 13 March 2020

• they must be off work for more than 4 consecutive days

As of 26 August 2020, the SSP rules have been amended to cover those self-isolating in advance of an operation. Workers who have been notified by a registered medical practitioner that they are to undergo a surgical or other hospital procedure, and have been advised to self-isolate in advance, are eligible for SSP for the period of self-isolation up to 14 days. Workers who are able to work from home while self-isolating in these circumstances are not entitled to SSP, but should be paid their normal wages.

The UK government also announced that Employment Support Allowance (ESA) will be available to the self-employed, and to workers whose earnings are too low to be eligible for SSP, if they are affected by Covid-19 or self-isolating due to UK government advice. ESA rules have also been relaxed so that payment is from day one of absence (instead of day eight), and to remove the need to attend a jobcentre to claim.

You may want to consider a temporary enhancement to the company sickness policy in order to incentivise people to remain off work, as insufficient sick pay provision risks individuals reporting for work. Any such changes should be kept under review and adapted as circumstances change.

 

What was the Coronavirus Statutory Sick Pay Rebate Scheme?

The Coronavirus Statutory Sick Pay Rebate Scheme enabled employers to reclaim SSP which they pay to current or former employees for periods of sickness starting on/after 13 March 2020. Employers were eligible for this scheme if they:

• were claiming for an employee who was eligible for sick pay due to coronavirus on of before 30 September 2021

• had a PAYE payroll scheme that was created and started on or before 28 February 2020

• had fewer than 250 employees on 28 February 2020

Employees could be on any type of employment contract, including full-time, part-time, agency, flexible or zero-hour contracts.

Where an employer pays more than the statutory rates of SSP (‘enhances’ or ‘contractual’ sick pay) they can only claim for the current rate amount.

Repayments under this scheme will cover up to two weeks of sickness, starting from the first day of sickness, provided that the employee was unable to work because they:

• had Coronavirus; 

• were isolating at home because they live with someone who was self-isolating due to having symptoms;

• were advised by letter to shield because they’re clinically extremely vulnerable and at very high risk of severe illness from coronavirus;

• were notified by the NHS to self-isolate before surgery for up to 14 days; or

• were isolating at home because they were told by the NHS Test and Trace that they had been in contact with someone who has Coronavirus

Employees did not have to provide a doctor’s fit note for employers to make a claim. Employers should make sure to keep records of SSP payments for three years.

Due to the rising number of Coronavirus cases, the Coronavirus Statutory Sick Pay Rebate Scheme will be reintroduced from mid-January 2022. Further guidance is expected shortly.

 

Can I make staff redundant?

It may not always be appropriate to make staff redundant completely.

You may wish to adopt flexible measures instead, for example, short-time (a reduction in hours) and lay-off working. If you do need to make redundancies ensure to follow the correct procedure. For further information and to make redundancy letters, read Redundancies. Alternatively, Ask a lawyer for workforce reduction advice. 

 

What does lay-off mean?

Lay-off is when an employer takes an employee off work and off pay for at least one working day. It is used as a response to lack of work, and as an alternative to making redundancies. For more information, read Lay-offs and short time working.

Check your employment contracts to see whether you are allowed to implement short-time and lay-off working. If they are currently not in the employment contract, you can get the employee's express consent to vary or change the contract to allow for lay-offs. You can use a Change to employment terms letter for this purpose. For further information read Changing employment terms.

There is a statutory scheme for lay-offs, but usually, a lay-off clause in the employment contract is required in order to implement this or with the consent of the employee.

 

How long can an employee be laid off for?

There’s no limit for how long an employee can be laid off or put on short-time. An employee could apply for voluntary redundancy and claim redundancy pay if it’s been:

• 4 weeks in a row
• 6 weeks in a 13-week period

 

What is the lay-off pay entitlement and short-time working payments?

Employees should get full pay unless the contract allows unpaid or reduced pay lay-offs.

If the lay-off is unpaid, employees are usually entitled to guarantee pay.

 

What is short-time working?

Short-time working is similar to lay-off, but rather than providing no work, the employer provides some, reduced, work. Less than half a normal week's work and pay will trigger the statutory short-time working protections for employees, subject to eligibility requirements.

A statutory 'guarantee payment' is payable to employees, subject to certain requirements. The maximum payment is £29 per day for up to five 'workless' days in any three-month period, so a total maximum of £145. Part-time payments are calculated pro-rata.

An employer could choose to pay more.

For further information read Lay-offs and short time working.

 

Can I make employees take annual leave?

You are entitled to give notice to staff to take annual leave, provided there is no agreement to the contrary (eg in the employment contract). Notice must be at least twice as long as the period of leave you require them to take, eg if you require an employee to take 1 week's annual leave, you must give them at least 2 weeks' advance notice.

 

Can I ask employees to volunteer for unpaid leave or redundancy?

If you wish for employees to take periods of unpaid leave, their consent is required unless their employment contract contains a clause allowing you to place them on unpaid leave.

While it is not always appropriate to make staff redundant completely, you may wish to seek out staff who are willing to take redundancy voluntarily. 

You cannot just offer voluntary redundancy to age groups eligible for an early retirement package - this could constitute discrimination. However, an early retirement package (for certain age groups) could be one element of a voluntary redundancy offer open to all staff. For more information read Redundancy.

 

Can I reduce my employee's pay?

Employers will need to consult with staff to obtain their express agreement to these measures where the employment contract does not contain any relevant contractual flexibility clauses or short-time working clauses.

You can consider using a Change to employment terms letter to change an employee’s terms and conditions of employment (with their consent).

 

What was the Coronavirus Job Retention Scheme?

Under the Coronavirus Job Retention Scheme (CJRS), which ran from March 2020 to 30 September 2021, 'furloughed' employees were employees who would have otherwise been laid-off during the crisis. Under the CJRS, employers in the UK were able to access support to continue paying part of these employees' salaries, therefore, keeping them on the payroll and avoiding the need to make them redundant. 

With the CJRS coming to an end on 30 September 2021, employers will need to consider: 

• ​​recalling furloughed staff back to work on their agreed terms and conditions.

• terminating furloughed staff’s employment, with normal redundancy rules continuing to apply. 

• coming to an agreement with staff about any changes to terms and conditions of employment. As the rules on changing employment terms and conditions continue to apply to furloughed staff.

Employers will need to consider the usual equality and discrimination laws when making decisions about how and when to end furlough arrangements.

Employers will need to make sure that any claims for furloughed staff in September are submitted by 14 October 2021 and any amendments made by 28 October 2021.

For further information read Furlough, workforce reduction and managing employees.

 

How can I recall a furloughed worker?

Since the Coronavirus Job Retention Scheme came to an end on 30 September 2021, you will need to determine how you wish to deal with staff that had been furloughed. If you wish to recall staff, you can use a Furlough letter for previously furloughed employees to inform a furloughed employee that they are to return to work. This letter informs a furloughed employee when their furlough period will come to an end and when they are expected to resume working.

You should provide a furloughed employee with ‘reasonable notice’ to return to work, to allow employees to make any necessary arrangements (eg child care arrangements).

 

What should furloughed employees be paid if they are then made redundant?

Furloughed employees who are then made redundant must receive statutory redundancy pay based on their normal wages rather than their furlough pay. This also applies to notice pay, which is where employees must be given a notice period before their employment ends.

 

Will workers on zero-hour contracts be paid if they are asked to self-isolate?

If a zero-hours worker earns over a certain average per week then they will be entitled to receive statutory sick pay (SSP) when told to self-isolate. Those zero-hours workers who currently do not meet the minimum earning requirements for SSP, will not be eligible for SSP unless further legislation is introduced unless the employer pays them voluntarily.

For further information on calculating SSP, read How to calculate statutory sick pay for zero-hours workers.

 

When will employees be paid statutory sick pay (SSP)?

Historically, SSP was not paid for the first three days of illness. The UK Government has passed new legislation allowing for SSP payment from day one of absence, for those unable to work as a result of being advised to self-isolate or because they have coronavirus. Additionally, in order for SSP to be payable from the first day of absence, employees:

• must be eligible for SSP
• their first day of sickness absence must have been on/after the 13 March 2020
• must be off work for more than 4 consecutive days

 

Are self-employed individuals entitled to sick pay?

Generally, employees are entitled to sick pay while self-employed individuals are not. This is because sick pay is paid by an employer. However, the Government intends to make it easier for self-employed individuals affected by Covid-19, to access benefits.

Those individuals on Employment and Support Allowance (ESA) who are suffering from Covid-19 or are required to self-isolate, will be able to claim the allowance from day one, instead of having to wait for seven days.

Further, the minimum income floor has been temporarily removed from Universal Credit for self-employed individuals who have to self-isolate as a result of coronavirus. The minimum income floor is an assumed level of income, which takes into account how much an individual would normally be expected to earn in a month when calculating their entitlement to Universal Credit. Not having this minimum income floor in place, means that self-employed individuals will be able to claim for the time they spend off work due to sickness.

Self-employed individuals in need of financial assistance will be able to apply for Universal Credit over the phone, without the need of attending a jobcentre. 

Self-employed individuals who do not have enough money to live on while they wait for their first Universal Credit payment can ask for an advance payment. This can be done online or through their Jobcentre Plus work coach. To apply, individuals will need to:

• explain why they need an advance

• verify their identity (either when they apply online or during their first phone appointment with the work coach)

• provide bank account details for the advance

For more guidance visit the Government website.

 

I’m struggling to meet my Self-Assessment payments on account. Is help available?

If you’re due to pay a self-assessment payment on account by 31 July 2020 but won't be able to make the payment by that date due to Covid-19, then you may defer payment until January 2021. As of 24 September, this period has been extended by the Government. Those due to pay up to £30,000 in tax by 31 January 2021 will be able to use HMRC's 'Time to Pay' service to pay over an additional 12 months, meaning they won't need to pay in full until January 2022.

To defer these payments, you don't need to make an application.

During the deferral period, you can set up a budget payment plan to help you pay the deferred payment on account when it comes due. You can set up a payment plan by either setting one up online (via the GOV.UK website) or calling the Payment Support Service on 0300 200 3835 (Monday to Friday, 8am to 4pm).

 

My employee is on holiday in a place which has closed its borders. What do I do?

If employees have been unable to return from holiday, you could choose to pay them (on a one-off discretionary basis) or ask them to take the time as annual leave or unpaid leave. You should treat employees consistently or you may risk discrimination claims.

 

Can we stop employees from taking personal travel?
Generally, you can't prevent people from travelling for personal reasons, however, you should remind employees of the current UK government guidance and ask employees to comply with any travel advice. The FCO and the UK government have advised against all non-essential travel. 

An alternative is to make clear that if they have to go into quarantine/self-isolation on their return, and remote working is not possible, extra time off will be unpaid unless they take it as paid holiday.

As with business travel, you should consider requiring individuals to inform you about when and where they have travelled, and to keep you updated of their personal travel plans so that you can continue to monitor risk and act accordingly.

Do I still need to fulfil my contractual obligations during the pandemic?

Check to see whether the contracts containing your obligations have a force majeure clause. You may be able to rely on this clause in certain circumstances. The purpose of a force majeure clause is to excuse a party (ie allow a party to 'get off the hook') from the performance of a contract following the occurrence of an event beyond the reasonable control of the parties which prevents contractual performance or makes it impossible.

Common examples of defined force majeure events are wars, strikes, natural disasters and government actions.

To rely on a force majeure clause will depend on 

• If the clause in your contract is drafted and interpreted in a way where disruptive events linked to Covid-19 constitute a force majeure event. Some clauses in some contracts may expressly cover pandemics and epidemics, but not all of them will. Ask a lawyer if you need help interpreting your force majeure clauses. 

• If there is a causal link between the unexpected event (or the event which is beyond the reasonable control of the relevant party) and that party’s delay or failure to perform the contract. 

• The circumstances, including the list of events, the effect that the relevant event has on a party’s ability to perform a contract, and also the specific consequences on each party’s contractual responsibility when that event occurs. 

Some force majeure clauses may also require that steps to reduce the risk of the effects of the unexpected event have been taken, or that written notice is given. 

Triggering a force majeure clause may not lead to a right to terminate the contract, but simply a right to delay performance by the duration of the unexpected event.

Make your Force majeure contract termination letter with Rocket Lawyer or Ask a lawyer if you need help interpreting your force majeure clauses.

I'm a commercial tenant. Do I still have to pay rent?

Ask your landlord for a rent concession, ie a more flexible arrangement, such as a rent holiday, payment of reduced rent or monthly payments. Landlords do not have to agree to this, but it is worth trying to reach an agreement. Landlords may be more likely to agree to a rent concession in the current climate.

You could also consider making a rent repayment plan with your landlord so you formally document when any unpaid paid rent will be paid.

If your landlord does agree to a rent concession, make sure this is documented, for example, in a deed of variation, which permanently changes the commercial lease.

The government announced in March 2020 that commercial tenants who cannot pay their rent will be protected from eviction for 3 months. This has now been extended until 25 March 2022 in England and Wales. Commercial tenants will be liable for the rent after this period.

Landlords will have a right to forfeit and recover any rent arrears again from 26 March 2022 so commercial tenants should be cautious about not paying their rent at all.

 

I'm a commercial landlord. What can I do if a tenant cannot pay their rent?

The government announced in March 2020 that commercial tenants will be protected from eviction for 3 months. This has now been extended until 25 March 2022 in England and Wales. However, the commercial tenant will still be liable for the rent after this period. From 26 March 2022, commercial landlords will again have the right to forfeit and recover any rent arrears from commercial tenants.

From 25 December 2020, landlords will also only be able to enforce Commercial Rent Arrears Recovery (CRAR)  where 554 days’ worth of rent is outstanding. This is expected to remain the case until 26 March 2022 in England and Wales.

If you do decide you are willing to offer the tenant a rent concession, you should document any such agreement in a side letter that sets out the changes and for how long it will last as a temporary arrangement. 

What’s the insolvency process?

Insolvency is a general term that can apply to both individuals and companies. Limited companies which become insolvent may be put into liquidation (also known as 'winding-up'). This will result in the cessation of trading, the sale of any assets to pay creditors and being struck off from the companies register. There are two types of liquidation, which of these will apply to you will depend on your individual circumstances.

To close a limited company because of insolvency (ie where a company cannot pay their bills or where a company’s liabilities exceeds its assets), a Creditors’ Voluntary Liquidation must be used. For more information on the process, read Closing a limited company.

Do face-coverings need to be public venues?

From 10 December 2021, face-coverings must be worn in most public indoor venues, including:

• shops and supermarkets

• post offices

• premises providing personal care and beauty treatments (barbers, hair salons, tattoo and piercing studios, nail salons and massage centres)

• public transport (aeroplanes, trains, trams, buses, coaches and ferries), taxis and private hire vehicles

• any car or small van during a professionally delivered driving lesson or test

• certain events and visitor attractions (eg cinemas and theatres)

​​Not that masks will not be needed in hospitality settings (eg pubs or restaurants) nor in venues where it is ‘not practical to wear them’ (eg where exercise or singing takes place).

Bear in mind that certain people may be exempt from wearing face coverings (eg due to health reasons). They do not need to show any written evidence of this, nor do they need to show an exemption card.

Consider updating Terms and conditions to reflect this and displaying signs about your business’ mask policy.

Most staff members are required to wear face coverings when they are in a part that is open to the public. Inform your staff of this.

 

Do we need to check the Covid-19 status of customers or workers?

From 15 December, certain businesses and events will have to check the Covid-19 status of workers and customers, using the NHS Covid Pass. 

Individuals will need to show their NHS Covid Pass to gain entrance to:

• nightclubs

• indoor unseated venues with more than 500 people

• unseated outdoor venues with more than 4,000 people

• any venue with more than 10,000 people

To gain entrance, individuals will either need to show that they are fully vaccinated against Covid-19 (ie have received two doses of an approved vaccination, and 14 days have passed since the last dose) or have tested negative for Covid-19 in the last 48 hours (eg using a lateral flow test).