Coronavirus (COVID-19) legal help for businesses
Rocket Lawyer is here to support you as a small business owner who may have legal questions during the Coronavirus (COVID-19) pandemic and its aftermath. We can answer your questions about how to manage your employee travel and sick leave policies, limit your liability, manage your commercial property and protect your workforce.
If you have questions about personal or family matters such as the impact of Coronavirus (COVID-19) on your employment, family and property or need help managing your personal legal affairs, visit our Coronavirus (COVID-19) guide for individuals and families.
This legal centre was last updated on 31 May 2022.
During the height of the pandemic, nurseries and businesses in the retail, hospitality and leisure sectors were offered a business rate relief. This relief stopped applying at the end of the 2020/21 tax year.
All businesses and self-employed people in financial distress and with outstanding tax liabilities may still be eligible to receive support with their tax affairs through HMRC's ongoing 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. The Time to Pay service is not limited to the pandemic.
The Recovery Loan Scheme has replaced the previously available 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, following an extension, is expected to end on 30 June 2022.
The original eligibility criteria are:
the business must be trading in the UK
the business has been affected by the pandemic
the business would be viable were it not for the pandemic
the business is not in insolvency proceedings
In addition to the original criteria, limitations to the scheme came into force on 1 January 2022:
only small and medium-sized businesses are eligible
the maximum amount of finance available per business is limited to £2 million
The guarantee coverage provided to lenders by the Government will be reduced to 70%
On 15 July 2020, the Government introduced a reduction in VAT, to 5%, for tourism and hospitality businesses. This reduction was extended but ended on 30 September 2021. From that date, a reduced rate of 12.5% was in effect until 31 March 2022. VAT then returned to 20%, the standard rate for hospitality.
This VAT cut applied 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, and attractions like cinemas, theme parks and zoos.
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.
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 policy (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.
As the post-pandemic return to the workplace combines with what looks to be a more enduring trend toward hybrid working, it may be a good idea to update your Flexible working policy to best suit how you want your employees to work more long-term, as you move on from the pandemic.
Employers have a duty to protect the health and safety of their workers. This could extend to asking employees to self-isolate or stay home for a recommended period, particularly if individuals have returned from a high-risk area abroad as defined by the FCDO, regardless of whether they are displaying symptoms. The decision to require self-isolation or for employees to stay at home should not be discriminatory and should be carried out with the rationale of protecting the health and safety of the wider workforce. Employers should take into account that self-isolation is no longer a legal requirement in the UK. Staying at home if you have Coronavirus (COVID-19) is still, however, recommended across the UK for various lengths of time (depending on where in the UK you are). Staff may or may not be able to work from home during this period, depending on the extent of any Coronavirus (COVID-19) symptoms and/or the nature of their role. Agreeing on a self-isolation policy with staff can prevent issues when the situation arises.
Requiring someone to self-isolate or stay at home may be in breach of their employment contract, but if the rationale for such action is to protect the health and safety of the wider workforce and/or is in response to UK Government guidance, then the employer’s duty in respect of health and safety is likely to triumph.
If you ask your employees to stay at home, you should support them during this time. For example, make sure you pay them any sick pay they are entitled to and, when possible, make sure they have all the support required to enable them to work 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. This includes assessing the risks associated with working with display screen equipment (DSE). 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.
Since 20 January 2022, people in England are not being asked to work from home and employers have been able to start safe returns to the workplace. Many employers have, as recommended, been using a gradual return to the workplace (eg with employees working in the office 2 days per week and working from home for the remaining 3 days).
Employers should ensure that the workplace is safe for staff. Face coverings and other Coronavirus (COVID-19) mitigation measures are no longer required in the UK. However, these measures should be considered in the context of each individual workplace and its associated risks. Employers should also ensure that they comply with any sector-specific guidance. For more information, read the Government’s guidance on working safely during Coronavirus (COVID-19).
People who have been in close contact with somebody with Coronavirus (COVID-19) are no longer required to self-isolate or take daily lateral flow tests. However, employers may consider encouraging employees who share a household with someone who has tested positive for Coronavirus (COVID-19) to work remotely where possible.
Before reopening a business, employers should conduct a Return to work risk assessment and share the results with their employees. All reasonable steps must be taken to minimise the risk of infection.
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. There was a sole exception related to Care Quality Commission regulated care homes and social care workplaces. However, this was lifted on 15 March 2022.
If employers wish for staff to get vaccinated, they can support them to do so but they should not force 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 their 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
ensuring 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
informing staff members that for travel for work, especially to high-risk countries, vaccines may 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.
If an employee is prevented from working because they are genuinely unwell or sick, then the business' 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 business' sick pay policy.
Statutory sick pay (SSP) may be payable to eligible workers. The Government temporarily amended the SSP rules during the pandemic so that workers with Coronavirus (COVID-19) could sometimes receive SSP if they were self-isolating and from the first day of their illness (as opposed to the usual fourth). Self-isolation could include isolating at home on a doctor’s advice in preparation for a surgery. However, since 24 March 2022, the SSP rules have reverted to normal and workers are not entitled to SSP when self-isolating unless they are genuinely unwell.
If self-employed people and workers whose earnings are too low to be eligible for SSP were affected by Coronavirus (COVID-19) or they had to self-isolate before 24 March 2022, Employment Support Allowance (ESA) may have been claimable. This payment has now reverted to its pre-pandemic eligibility criteria.
With the removal of lots of Government support for people who have Coronavirus (COVID-19), employers may want to consider a temporary enhancement to their business sickness policies in order to incentivise people to remain off work. Insufficient sick pay provision, for instance, risks encouraging individuals to report for work whilst ill and contagious. Any such changes should be kept under review and adapted as circumstances change.
The Coronavirus Statutory Sick Pay Rebate Scheme enabled employers to reclaim SSP which they paid to current or former employees for periods of sickness starting on/after 13 March 2020. The original scheme ended but was reintroduced in mid-January 2022 during the Omicron outbreak. Under the extended Coronavirus Statutory Sick Pay Rebate Scheme employers could make claims for employees who were off work on or after 21 December 2021. The extended scheme has now ended, and the last date to make a claim was 24 March 2022.
It may not always be appropriate to make staff completely redundant.
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.
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 or the employee’s consent is required in order to implement this.
There’s no limit on 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 they’ve been laid off for at least:
4 weeks in a row
6 weeks in a 13-week period, with no more than 3 weeks in a row
Employees should get full pay unless their contract allows for unpaid or reduced pay lay-offs.
If the lay-off is unpaid, employees are usually entitled to ‘guarantee pay’ (see below).
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 £31 per day for up to five 'workless' (including some reduced work)days in any three-month period, so a total maximum of £155. Part-time payments are calculated pro-rata. For more information, read the Government’s guidance.
An employer could choose to pay more.
For further information read Lay-offs and short time working.
You are entitled to give notice to staff if you’re requiring them 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.
To clearly establish your business’ approach to asking employees to take annual leave, you can create an Annual leave policy.
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.
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).
Under the Coronavirus Job Retention Scheme (CJRS), which ran from March 2020 to 30 September 2021, 'furloughed' employees were employees who may 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.
The deadline for any claims by employers for staff furloughed in September 2021 was 14 October 2021, or 28 October 2021 for amendments
If a zero-hours worker earns over a certain average per week then they will be entitled to receive statutory sick pay (SSP) when they are ill. Zero-hours workers who currently do not meet the minimum earning requirements for SSP will not be eligible for SSP. Their employer can pay them sick pay voluntarily.
For further information on calculating SSP, read How to calculate statutory sick pay for zero-hours workers.
Generally, employees are entitled to sick pay while self-employed individuals are not. This is because sick pay is paid by an employer. During the pandemic, the Government made it easier for self-employed individuals affected by Coronavirus (COVID-19), to access benefits.
For example, individuals could receive Employment and Support Allowance (ESA) if they had to quarantine or self-isolate due to Coronavirus (COVID-19) before 24 March 2022 and were unable to claim SSP. They could claim the allowance from day one, instead of having to wait for seven days.
Further, the minimum income floor was temporarily removed from Universal Credit for self-employed individuals who had to self-isolate as a result of Coronavirus (COVID-19). 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. However, the income rules reverted to the pre-pandemic rules on 31 July 2021.
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 option was available before the pandemic and continues to be available beyond it. 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.
The Government introduced an option to defer self-assessment payments on account to assist people affected by the Coronavirus (COVID-19) pandemic. This deferral programme ended in January 2022.
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.
Generally, you can't prevent people from travelling for personal reasons, however, you should remind employees to check any Coronavirus (COVID-19) related guidance issued by their destination country. Some destinations will still have restrictions in place.
As with business travel, you could consider requiring individuals to inform you about when and where they have travelled, and to keep you updated on their personal travel plans so that you can continue to monitor risk and act accordingly.
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 Coronavirus (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.
During the height of the pandemic, many commercial tenants asked for and were granted rent concessions (ie more flexible arrangements such as rent holidays, payments of reduced rent, or monthly payments). Landlords did not have to agree to this, but many did.
Some commercial tenants will have made rent repayment plans with their landlords to formally document when any unpaid paid rent will be paid.
Some tenants and landlords will have documented their rent concessions in, for example, a deed of variation, which permanently changes the commercial lease.
In March 2020, the Government introduced a moratorium on the eviction of commercial tenants who could not pay their rent. This was extended until 25 March 2022 in England and Wales. Similar provisions expired on 31 March 2022 in Scotland. Since the end of March 2022, commercial tenants are again liable for their rent as usual.
On 26 March 2022, a new arbitration procedure came into force under the Commercial Rent (Coronavirus) Act 2022. The procedure applies to certain businesses whose premises were mandated to close during the pandemic. This arbitration procedure provides a method by which commercial landlords and tenants can resolve the issue of rent arrears accumulated during the pandemic if they haven’t been able to come to an agreement. For parties who choose to utilise this option, the arbitrator’s decision will be legally binding and may impose a repayment period up to a maximum of 24 months. The process aims to find a balance between preserving the rights of the landlord and the tenant. Businesses which are eligible to make use of this process will be further protected from eviction for either 6 months or until their arbitration process has concluded. For more information, read the Government’s guidance.
During the pandemic, landlords had to abide by the eviction moratorium and extended CRAR eligibility criteria (ie 554 days of rent had to be outstanding before the procedure could be used). As described above, these tenant protections have since lapsed and landlords of most commercial premises again have the right to forfeit and recover any rent arrears from commercial tenants (eg by utilising the usual CRAR process.
Landlords of eligible business premises can now make use of the Commercial Rent (Coronavirus) Act 2022 arbitration procedure (described above). Landlords of tenants whose business is eligible for this scheme (ie they were mandated to close during the pandemic) cannot evict their tenants for a further 6 months following the process’ introduction on 26 March 2022, or if they and their tenant engage in this process until the process has concluded.
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 exceed its assets), a Creditors’ Voluntary Liquidation must be used. For more information on the process, read Closing a limited company.
Since 27 January 2022, face-coverings have not been legally required in most public indoor venues.
Decide if you want to require face coverings to be worn on your business premises, even if not legally required.
Remain mindful of equality and discrimination laws and 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, displaying signs about your business’ mask policy and updating staff.
Since 27 January 2022, businesses and events have not needed to check the Coronavirus (COVID-19) status of workers and customers. The NHS Covid Pass is no longer required for access to events and venues in the UK.