Member News

MHA Larking Gowen has been working on numerous blogs, brochures and videos to give businesses the latest advice on the ever-changing COVID-19 pandemic. 

We have specialist sector teams in Tourism, Leisure and Hospitality, Not for Profit, Medical, and Farms and Landed Estates, as well as specialists in Tax, Payroll, Corporate Finances, Insolvency and Business Advisory. Our teams are commited to helping where they can with advice and support, so please get in touch at enquiry@larking-gowen.co.uk or visit our dedicated COVID-19 Hub.

  Watch our latest videos, including a ‘top 10 tips’ series    Business Advisory Partners, James Lay and Mark Curtis, have filmed some brief videos on disaster planning, problem solving, decision making and business prioritising. They have also filmed a series of short videos giving you the top 10 business tips designed to help you problem solve, prioritise and keep calm. These are tried and tested methods and are beneficial to most businesses as we navigate through these uncertain times   COVID-19: Current Business Support   You can download our Current Business Support document from our COVID-19 Hub which outlines the current business support measures issued by the Government, and includes information on who is expected to be eligible for the reliefs. To help you identify which schemes are actually beneficial to you, we have produced a flow chart – What financial support is there for me and my business?   Read the latest blogs and helpsheets from our experts   Our experts are keeping up to date with the guidance as it is released, and our blogs and helpsheets cover a wide range of topics such as How to manage COVID-19 anxiety to What you can do if you’ve made capitol losses in the 2019/2020 tax year. You can view a full list of all resources on our COVID-19 hub.

The Chancellor, Rishi Sunak, has unveiled a set of financial measures to support businesses through this period of disruption caused by COVID-19, which includes the latest rescue packages for employed and self-employed workers.

A summary of the measures to support business include:

Coronavirus Job Retention Scheme On 20 March 2020, the Chancellor announced a rescue package for businesses and workers, by introducing a Coronavirus Job Retention Scheme (CJRS).

Under the new scheme, employers can contact HM Revenue & Customs (HMRC) to apply for a grant (not a loan) to cover up to 80% of furloughed workers’ salaries, up to £2,500 per month. Employers can choose to top up the salary of retained workers if they so choose.

Furloughed workers are workers that are to be retained but have been asked to take a temporary leave of absence. The employee should not undertake work whilst they are furloughed.

If you are to treat employees as furloughed workers, you will need to notify them of the change. Changing the employment status remains subject to existing employment law, depending on the employment contract, and may be subject to negotiation.

The grant will be backdated to 1 March 2020 and will initially be available up to a period of three months, however, this period may be extended by the government if required.

The first grants will be available in the coming weeks and by the end of April 2020 for all businesses.

Eligibility criteria: – All UK businesses are eligible – Available for employees on the payroll at 28 February 2020

Application process: – Designate affected employees as ‘furloughed workers’ and notify your employees of this change – The employer will pay the employee through payroll, using the Real Time Information (RTI) system as usual – Submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal that is currently being developed by HMRC

Further information on how the scheme operates, calculating the grant amount and what you need to do to make a claim can be found here.

If your business needs short term cash flow support, you may be eligible for a Coronavirus Business Interruption Loan (CBIL) – see below.

Self-Employment Income Support Scheme On 26 March 2020, the Chancellor announced the new Self-Employment Income Support Scheme (SEISS). The scheme will support self-employed individuals, including members of partnerships, who have lost income due to COVID-19.

Eligible recipients will be able to claim a taxable grant worth 80% of their trading profits, up to a maximum of £2,500 per month, available for 3 months in one lump-sum payment. This may be extended if needed.

Further information on the scheme eligibility and application process can be found here.

VAT Deferral It was also announced that VAT liabilities due for the period 20 March 2020 to 30 June 2020 will be deferred until the end of the 2020/21 tax year.

VAT refunds and reclaims will be paid by the government as normal.

More information can be found here

Eligibility criteria: – All UK businesses are eligible

Application process: – This is automatic with no applications required. – Customers who normally pay by direct debit may need to cancel their direct debit with their bank, if they are unable to pay. Please do so in sufficient time so that HMRC do not attempt to automatically collect on receipt of your VAT return.

Self-Assessment Income Tax Deferral Self-assessment payments, normally due 31 July 2020, will be deferred until 31 January 2021.

The deferment is optional. If you are still able to pay your second payment on account on 31 July you should do so.

No penalties or interest for late payment will be charged if you defer payment until January 2021.

Eligibility criteria: – You are eligible if you are due to pay your second self-assessment payment on account on 31 July. You do not need to be self-employed to be eligible for the deferment.

Application process: – This is automatic with no applications required.

Self-Employed – Universal Credit and Rental Costs Self-employed individuals will also be able to access, in full, Universal Credit at a rate equivalent to Statutory Sick Pay (SSP) for employees and a further £1bn to cover 30% of house rental costs.

Government Backed Loans From 23 March 2020, the government’s Coronavirus Business Interruption Loan Scheme (CBILS) went live, making available loans for small and medium sized businesses up to £5 million in value. The government will cover interest charges for the first twelve months, as well as any lender-levied fees.

The scheme provides the lender with a government backed guarantee against the outstanding facility balance, however, the borrower remains liable for the debt.

We have already been in contact with our local bank contacts and can assist in an application where appropriate.

The CBILS will be provided by the British Business Bank through participating providers, and will offer attractive terms for both businesses applying for new facilities and lenders.

Finance terms are available up to six years for term loans and asset finance facilities. For overdrafts and invoice finance facilities, terms will be up to three years.

For further information, the British Business Bank have put together the following FAQ.

Further details regarding the CBILS, can be found here.

Eligibility criteria: – Be UK based, with turnover of no more than £45 million per annum – Have a borrowing proposal which, were it not for the current pandemic, would be considered viable by the lender, and for which the lender believes the provision of finance will enable the business to trade out of any short-to-medium term difficulty. – Are not an excluded trade or organisation (eg banks, building societies, insurers and reinsurers – but not insurance brokers)

Application process: – The scheme is now open for applications. All major banks are offering this scheme. To apply, you should talk to your bank or one of the other participating providers. We can assist in an application where appropriate.

Business Rate Holiday For the 2020/21 tax year, business rates will be abolished for all retailers, leisure outlets and those in the hospitality sector. It was also announced that estate agents, lettings agencies and bingo halls will receive the business rate relief for 2020/21, along with qualifying nursery businesses.

Eligibility criteria: – Your business is based in England – Your business is in the retail, hospitality and/or leisure sector – Your business is an estates agent, lettings agency or bingo hall – Your business is a qualifying nursery

Properties that will benefit from the relief will be occupied hereditaments that are wholly or mainly being used:

– as shops, restaurants, cafes, drinking establishments, cinemas and live music venues – for assembly and leisure – as hotels, guest & boarding premises and self-catering accommodation – as an estate agent, lettings agency or bingo hall – as a qualifying nursery

Application process: – Your local authority should apply the relief automatically to your 2020/21 business rates bill. This may have to be rebilled if you have already received it.

Grants For businesses in retail, leisure and hospitality sector operating from smaller premises, with a rateable value of between £15,000 and £51,000, you will be eligible for a grant of £25,000.

A grant of £10,000 is available for businesses with rateable value up to £15,000.

You can check your rateable value here.

Eligible recipients will receive one grant per property (hereditament).

If you are eligible for Small Business Rate Relief (SBRR) or Rural Rate Relief (RRR) then there is a one off grant of £10,000 available.

Eligibility criteria: – your business is based in England – your business is in the retail, hospitality and/or leisure sector with a rateable value less than £51,000; or – your business is eligible for Small Business Rate Relief (SBRR) or Rural Rate Relief (RRR)

Application process: – The grants will be available through your local authority, who will write to you if you are eligible for this grant. Details of the grant publication can be found here.

Businesses with a rateable value of £51,000 or over, or are not ratepayers in the business rate system, are not eligible for the grants.

Statutory Sick Pay (SSP) Small and medium sized businesses will be able to reclaim SSP up to two weeks per employee where their sickness has been because of COVID-19.

Eligibility criteria: – You businesses is UK based – Your business is a small or medium-sized and employs fewer than 250 employees as of 28 February 2020

Application process: – The mechanism of how businesses can claim this back will be published in the next couple of months, which we understand will be through a rebate scheme that is currently being developed.

SSP is due to be paid from the first day of sickness absence, rather than the fourth day, for people who have COVID-19 or have to self-isolate, in line with official government guidance. The measure applies retrospectively from 13 March 2020.

HM Revenue & Customs -Time to Pay Arrangements HMRC have set up a telephone helpline to support businesses and self-employed people concerned about not being able to pay their tax due to coronavirus (COVID-19).

On a case by case basis, HMRC have always looked at agreeing time to pay arrangements for Self-Assessment, Corporation Tax, PAYE and VAT liabilities. We have found them to be very amenable in the past and HMRC have increased the staff availability to meet demand.

For those who are unable to pay due to coronavirus, HMRC will discuss your specific circumstances to explore:

– agreeing an instalment arrangement – suspending debt collection proceedings – cancelling penalties and interest where you have administrative difficulties contacting or paying HMRC immediately

Eligibility criteria: – Pays tax to the UK government – Have outstanding tax liabilities

Application process: – Call the HMRC dedicated helpline number: 0800 0159 559

The above measures being implemented by the government are correct as at 26 March 2020, however, we understand more measures could be implemented dependant on the progress of the pandemic and the economic impact this has in the UK.

The following government website is a useful source of information and is being updated daily click here for updates.

Our HR team have also put together some COVID-19 FAQs for employers here.

If you would like further information, please do contact us.

We are currently residing in a period where many in society are feeling particularly vulnerable, whether this be due to the threat of potential ill health or financial insecurity. At points in time such as these criminals seek to take advantage by preying on the resultant fears and insecurities of individuals.

It is therefore important that you remain as vigilant as possible in spotting potential scams- especially given the seemingly apparent authenticity and realism a lot of these convey to unsuspecting targets. The clever and emotive nature of these campaigns can leave even the most scrupulous and diligent of individuals open to attack at the hands of scam-artists.

HMRC have recently published the following examples of what to look out for:

Email scams

Phishing emails which coerce individuals into disclosing personal details such as passwords or bank details have been received by some. These can often be under the guise of issuing a tax refund to ‘protect yourself against Covid-19’. It is important to scrutinise the legitimacy of emails as thoroughly as possible in order to spot fraudulent attempts.

These emails will often include spoof email addresses and disguise display names to convey legitimacy.

Rules about wrongful trading have been temporarily suspended to provide directors with a greater degree of comfort when taking difficult decisions during the COVID-19 crisis – but they must still demonstrate that they have acted reasonably, says Andrew Turner of Lovewell Blake.

Company directors facing difficult decisions during the coronavirus crisis have been handed a potential lifeline with the suspension, backdated to 1st March 2020, of wrongful trading provisions, which might otherwise have hampered their ability to take decisions to secure the future of their businesses.

The current wrongful trading provisions mean that company directors can face personal liability if they fail to take account of the impact on creditors in a situation where trade is continued, when the director knew, or should have concluded, that the company couldn’t reasonably avoid liquidation (or administration) and creditors wouldn’t be paid in full.

In effect the changes should enable companies to continue trading in the short term, beyond the point where we would normally be advising they should cease, with directors having greater confidence that using their best endeavours to continue trade should not result in them being exposed to personal liability should the company ultimately fail.

In the current situation, with much of the economy effectively on pause, many directors are wrestling with decisions to safeguard the future of their businesses, which might otherwise have fallen under the wrongful trading microscope under the regulations. The Government is keen that when we emerge from this crisis as much of the economy is still intact as possible, and this is the reason for the temporary relaxation of the provisions.

However, and this is important, the suspension of the wrongful trading provisions are not a blanket waiver; directors do not have a ‘get out of jail free’ card to protect themselves from the consequences of their decisions and actions.

They will have to be able to demonstrate that what they do during the crisis is reasonable, and would be most likely to promote the survival of their company. And existing laws on fraudulent trading, transactions defrauding creditors, and misfeasance still apply.

Directors facing difficult decisions have a greater need than ever to take professional advice to be in the best position of steering their businesses through the crisis, and in doing all that they can to minimise the risks of potential future action against them.

If you would like further information, please contact Andrew Turner.

Lovewell Blake – Coronavirus Job Retention Scheme and Furlough Workers – FAQ’s

Which employees are eligible under the Coronavirus Job Retention Scheme?

In order to be an eligible employee in line with the scheme, furloughed employees must have been on your PAYE payroll on 28 February 2020, and include:

• full-time employees • part-time employees • employees on agency contracts • employees on flexible or zero-hour contracts

Employees who commenced their employment with their employer after 28 February 2020 cannot be furloughed and claimed for in accordance with this scheme.

If an employee was made redundant, or they stopped working for you on or after 28 February 2020, you are able to re-employ them, put them on furlough and claim for their wages though the scheme.

As well as employees, the grant can be claimed for any of the following groups, if they are paid via PAYE:

• office holders (including company directors) • salaried members of Limited Liability Partnerships (LLPs) • agency workers (including those employed by umbrella companies) • limb (b) workers

The guidance sets out specific considerations for those individuals who are paid via PAYE, but who are not necessarily employees in employment law. Unless explicitly set out in the government guidance of this scheme, all other guidance is applicable to these cases, and should be followed.

How do I obtain agreement from employees to place them on a period of furlough leave?

Changing the status of an employee to a furloughed worker is a contractual variation and therefore agreement (via a written furlough worker agreement) should be sought from employees for this to happen, contracts cannot be amended unilaterally. Therefore, unless there is a relevant clause within the employee’s contract of employment to cover this situation (and in any event best practice would be to consult and obtain agreement), you would need to obtain an employee’s express written agreement to do so.

If your contract of employment does not have a specific lay off clause giving you the right to lay off employees with no pay then you will need to seek the agreement from employees to only pay 80% of their salary, if employees do not agree to this then you will have to pay 100% of their pay and claim back 80% through the CJRS. Where you are unable to obtain agreement, the other option is to consider starting a redundancy procedure.

If you have 20 or more employees that this would affect, keep in mind that you may have collective consultation obligations in the event of proposing to dismiss employees (this includes redundancies as well as dismissing and re-engaging for the purposes of varying a contract of employment).

Do I need to put anything in writing to an employee regarding the furlough leave period?

Employers should discuss with their employee regarding any proposal to place them on a period of furlough leave and look to seek their agreement to this.

To be eligible for the scheme employers should write to their employee confirming that they have been furloughed (and obtain their written agreement to this) and keep a record of this communication for a period of 5 years. We would therefore advise that a written furlough worker agreement is implemented, please contact the HR team if you would like a template.

Can my employee undertake any work whilst on a period of furlough leave?

An employee must not undertake work for or on behalf of your organisation. This includes providing services or generating revenue for the business, or any organisation linked or associated with your business.

The guidance states that if an employee is working, but on reduced hours, or for reduced pay, they will not be eligible for this scheme and you will have to continue paying the employee through your payroll and pay their salary subject to the terms of the employment contract you agreed. For example, if you have placed an employee on a short time working arrangement and they continue to undertake this, then they would not be eligible as part of the scheme as they would still be undertaking work for the organisation.

How much of an employee’s pay can be claimed back from the Government in line with this scheme?

Employers can use a portal to claim for 80% of furloughed employees’ (employees on a leave of absence) usual monthly wage costs, up to £2,500 a month, plus the associated Employer National Insurance contributions and minimum automatic enrolment employer pension contributions on that wage.

You can claim for any regular payments you are obliged to pay your employees. This includes wages, past overtime, fees and compulsory commission payments. However, discretionary bonus (including tips) and commission payments and non-cash payments should be excluded.

The reference salary should not include the cost of non-monetary benefits provided to employees, including taxable Benefits in Kind. Similarly, benefits provided through salary sacrifice schemes (including pension contributions) that reduce an employee’s taxable pay should also not be included in the reference salary. Where the employer provides benefits to furloughed employees, this should be in addition to the wages that must be paid under the terms of the Job Retention Scheme. If employers need to stop any contractual benefits during this time, then they should consider whether they have the relevant contractual right to do so within the employee’s contract of employment or seek agreement from employees. In these circumstances, we would advise seeking guidance on the process to follow.

Normally, an employee cannot switch freely out of a salary sacrifice scheme unless there is a life event. HMRC agrees that COVID-19 counts as a life event that could warrant changes to salary sacrifice arrangements, if the relevant employment contract is updated accordingly.

In order to make use of this scheme do I have to furlough all employees immediately?

You do not need to furlough all of your employees in order to make use of this scheme. When considering whether to furlough an individual it is important to consider whether or not the Company and their role have been significantly affected by Covid-19. The purpose of the scheme is to protect employees’ employment and to minimise/avoid organisations having to either lay off employees or to consider compulsory redundancies, as a result of the impact of Covid-19 on organisations.

Employers can use this scheme anytime during the period in which it is in place for, which is currently until 31 May 2020, although it may be extended.

Can I furlough an employee who is currently on sick leave or self isolating?

Employees on sick leave or self-isolating will be able to receive Statutory Sick Pay (subject to usual eligibility requirements) during this period (or sick pay arrangements in line with normal Company policy). The government guidance states that short-term illness/self isolation should not be a consideration in deciding whether to furlough an employee. If, however, employers want to furlough employees for business reasons and they are currently off sick, they are eligible to do so, as with other employees. In these cases, the employee should no longer receive sick pay and would be classified as a furloughed employee instead.

Can I furlough an employee who has received a letter from a medical adviser stating that they need to self-shield for a 12-week period?

Yes, employers are entitled to furlough employees who are being shielded (or they need to stay at home with someone who is shielding) or off on long term sick leave. The guidance states that it is up to employers to decide whether to furlough these employees. Employers can make a claim through the CJRS and the SSP rebate scheme for the same employee but not for the same period of time. Therefore, when an employee is on a period of furlough leave employers can make a claim through the CJRS but not the SSP rebate scheme.

What happens if an employee falls unwell during a period of furlough leave?

If an employee becomes unwell during a period of furlough leave, the government guidance states that an employer is not obliged to end the period of furlough leave and place the employee on sickness absence instead (for example SSP), however they can choose to do so.

If a furloughed employee who becomes unwell is moved across to SSP, then the employer is no longer able to claim for the furloughed pay through the CJRS. Employers are required to pay SSP themselves. If employers keep unwell furloughed employees on the furloughed rate, they will remain eligible to claim for these costs through the CJRS.

Can I place an employee on a period of furlough leave, who commenced their employment with the Company on 4 March 2020?

Employees who commenced employment with the organisation after 28 February 2020 cannot be furloughed or claimed for in accordance with this scheme.

Do employees still accrue holiday during a furlough leave period?

Yes, statutory annual leave will continue to accrue as normal during a furlough leave period. Contractual annual leave in excess of the statutory minimum will also continue to accrue, unless the contract specifically provides otherwise. We have included relevant wording within the template furlough worker agreement in relation to this.

The Government has announced that it will be implementing legislation in relation to statutory holiday entitlement in order to allow workers to carry over up to 4 weeks’ annual leave into the next two leave years to assist with the impact of Covid-19 on holiday entitlements and the ability to take leave. The additional 1.6 weeks can already be carried forward in to the next leave year if agreed by both parties.

What happens if an employee has more than one job?

If your employee has more than one employer, then they can be furloughed for each of the jobs that they undertake. Each job is separate, and the cap applies to each employer individually.

Employees can be furloughed in one job and receive a furloughed payment but continue working for another employer and receive their normal wages.

Can my employee get a new job whilst they are on furlough leave with my company?

If contractually allowed, your employees are permitted to work for another employer whilst you have placed them on furlough, in line with the government guidance on the scheme. It is common for relevant clauses within an employee’s contract to state that they may not undertake work for another organisation unless express permission is obtained from the company.

How should I select employees to place them on a period of furlough leave?

The organisation should ensure that it follows a fair procedure in order to select employees for furlough leave and that decisions made are in line with the usual requirements of equality and discrimination legislation and best practice. Employers should also consider whether it would be possible to request volunteers.

We would advise that employers keep a record of the reason/decision made to furlough employees.

Can an employee become a volunteer whilst undertaking a furlough leave period?

A furloughed employee can take part in volunteer work, as long as it does not provide services to or generate revenue for, or on behalf of your organisation or a connected organisation. It is advisable for employers to consider implementing a policy/guidance in relation to the emergency volunteering legislation, issued by the Government, as part of measures being taken to manage the impact of Covid-19.

Can an employee undertake training during a furlough leave period?

A furloughed employee can take part training, as long as it does not provide services to or generate revenue for, or on behalf of your organisation or a linked or associated organisation. The government guidance states furloughed employees should be encouraged to undertake training.

However, if workers are required to for example, complete online training courses whilst they are furloughed, then they must be paid at least the NLW/NMW for the time spent training, even if this is more than the 80% of their wage that will be subsidised. The NLW/NMW increases from 1 April 2020 must be taken in to account for any time spent training.

Can apprentices be furloughed?

Yes, apprentices can be furloughed in the same way as other employees and they can continue to train whilst furloughed.

However, you must pay your Apprentices at least the Apprenticeship Minimum Wage, National Living Wage or National Minimum Wage (AMW/NLW/NMW) as appropriate for all the time they spend training. This means you must cover any shortfall between the amount you can claim for their wages through this scheme and their appropriate minimum wage. The AMW/NLW/NMW increases from 1 April 2020 must be taken in to account for any time spent training.

Guidance is available for changes in apprenticeship learning arrangements because of COVID-19.

Can you furlough an employee who is currently on maternity leave?

An employee must take their compulsory maternity leave which is at least 2 weeks off work (4 weeks if they work in a factory or workshop) immediately following the birth of their baby. This is a health and safety requirement. The government guidance states that normal rules apply with regards to SMP and leave provisions. The guidance does not provide definitive information on whether an employee on maternity leave can be designated as a furloughed worker or whether they would have to end their maternity leave period (by providing the required 8 weeks’ notice) and then be placed on a period of furlough leave. It is important to note that it is also unknown whether those on maternity leave would be able to become a furlough worker and, when the furlough leave ends, then be able to return to their maternity leave period. There is a risk that furloughing those on maternity leave could mean they have to return to work earlier than they expected if they are unable to continue with their maternity leave after a period of furlough leave or when the job retention scheme ends.

We await further guidance on this point. This would also apply to those undertaking a period of other family-related leave.

For those employees only receiving Statutory Maternity Pay (SMP)

It seems that the guidance does not envisage employees being placed on a period of furlough leave and becoming a furlough worker whilst receiving SMP. Employers can already claim back the cost of SMP under current rules in relation to this.

For those employees who receive enhanced contractual maternity pay

The HMRC guidance states that where employers pay contractual maternity pay at a higher rate than SMP, then an employer would be able to make a claim through the CJRS for enhanced (earnings related) contractual pay for employees.

How should I calculate what to pay an employee returning from family-related leave?

Their pay should be calculated in line with other employees and should be calculated against their salary, before tax, not the pay they received whilst on statutory leave.

Claims for those on variable pay, returning from statutory leave should be calculated using either the:

• same month’s earning from the previous year • average monthly earnings for the 2019-2020 tax year.

Can an employer choose to pay 100% of an employees pay, whilst they are undertaking a period of furlough leave?

As a minimum, employers must pay their employee the lower of 80% of their regular wage or £2,500 per month. An employer can choose to top up an employee’s salary to 100% but is not obliged to under this scheme.

Employer National Insurance Contributions and automatic enrolment contribution on any additional top-up salary will not be funded through this scheme. Nor will any voluntary automatic enrolment contributions above the minimum mandatory employer contribution of 3% of income above the lower limit of qualifying earnings (which is £512 per month until 5th April and will be £520 per month from 6th April 2020 onwards).

How do I calculate an employee’s pay for the purposes of this scheme?

For full time and part time salaried employees, the employee’s actual salary before tax, as of 28 February should be used to calculate the 80%.

For an employee whose pay varies, if the employee has been employed for a period of 12 months or more prior to the claim, you can claim for the higher of either:

• the same month’s earning from the previous year; or • average monthly earnings from the 2019-20 tax year

If the employee has been employed for less than a year, you can claim for an average of their monthly earnings since they started work.

If the employee only started in February 2020, use a pro-rata for their earnings so far to claim.

Once you’ve worked out how much of an employee’s salary you can claim for, you must then work out the amount of Employer National Insurance Contributions and minimum automatic enrolment employer pension contributions you are entitled to claim.

Are employees entitled to national minimum/national living wage whilst on furlough leave?

Individuals are only entitled to the National Living Wage (NLW)/National Minimum Wage (NMW) for the hours they are working or treated as working under minimum wage rules.

Therefore, furloughed workers, who are not working, must be paid the lower of 80% of their salary, or £2,500 even if, based on their usual working hours, this would be below NLW/NMW.

However, if workers are required to for example, complete online training courses whilst they are furloughed, then they must be paid at least the NLW/NMW for the time spent training, even if this is more than the 80% of their wage that will be subsidised.

What employment rights do employees have whilst on furlough leave?

Employees that have been furloughed have the same rights as they did previously. That includes Statutory Sick Pay entitlement, maternity rights, other parental rights, rights against unfair dismissal and to redundancy payments. Terms and conditions of employment and continuity of employment will not be affected during this period.

Can you make an employee redundant whilst they are on a furlough leave period?

Yes, providing you follow a fair procedure in line with current employment law legislation and best practice, you can make an employee redundant whilst they are undertaking a period of furlough leave or when they return from a period of furlough leave.

What happens if an employee refuses to be placed on a period of furlough leave?

If an employee refuses to be placed on a period of furlough leave then the organisation will need to consider alternatives, which may be to place them on a period of lay off or short time working (providing there is a relevant clause within the contract of employment to do so) or consider implementing a redundancy process. In either of these situations, it would be advisable to seek guidance from the HR team on the process to follow.

Can an employer rotate employees who are furloughed?

Yes, employees can be rotated to be placed on a period of furlough leave and can be furloughed multiple times, providing that each separate instance is for a minimum period of 3 consecutive weeks.

What happens in TUPE situations/change of ownership?

A new employer in these situations will be eligible to make a claim under the CJRS in respect of employees of a previous business transferred after 28 February 2020 if either the TUPE or PAYE business succession rules apply to the change in ownership.

If you have any questions, please do contact us.

We’re extremely excited to announce that Safepoint is now a member of the MongoDB Startup Accelerator! The programme provides in-depth tools and support to get the most out of our database-allowing us to deliver an even better Safepoint experience to our users! You can discover Safepoint, powered by MongoDB, by visiting our How it Works page or by starting your 14-day free trial today!

My partner Charley works in Critical Care at NNUH. She and her 100+ colleagues do an amazing job all year round but in these stressful times I asked how we could help, and she said… Coffee!

My awesome teammates rallied around and purchased 3 machines to get things started. We would then like to give huge thanks to Paul & Phil at Tesco who have gone above and beyond to get all local stores to help the cause!

But… we can still do more, these nurses and consultants get through coffee ridiculously quickly, so let’s keep them topped up. Who knows, if we raise enough, we may be able to help even more hospitals in the strive for great (or better) coffee! If you or any of your colleagues would like to get involved, please make donations here. Any donations would be greatly appreciated.

However, we shouldn’t forget about the great work other charities are doing and will also be supporting the Norwich City Community Sport Foundation to make sure they hit the ground running when things settle down!

If your colleagues want to support and have a bit of fun at the same time, please also sign up here to our Charity FIFA Tournament and your company could soon be lifting the coveted Chadwicks Cup!

Watch this space as we will be running more (remote) activities over the coming weeks to help spread a bit of fun during these strange times, all for the same causes! This will start with our daily quiz and you will be able to obtain the answers from the Chamber. More details will be announced shortly!

Dan & The Team

Anglian Water turns on the tap with £1million fund for local communities • £1million Positive Difference Fund created to support local community organisations • New fund doubles the £1m already available to customers through the Anglian Water Assistance Fund • Builds on massive Extra Care direct support package assisting families financially hit by COVID-19 • Supply chain deals and enhanced payment terms keep thousands more in employment as key workers • Company will kick-start a fund to help employees and their families facing financial hardship • Restates commitment to workforce, continues with apprentice recruitment, honours all existing job offers

Communities in the Anglian Water region are to receive a cash boost to fight the impacts of Coronavirus as the water company’s owners backed plans to establish a new £1 million community support fund.

The Anglian Water Positive Difference Fund will be distributed through a locally appointed partner which has expertise in getting money quickly to areas in which it is most needed.

Fifty per cent of the fund will immediately be made available to support community organisations on the front line of the battle against coronavirus, with a further fifty per cent released to meet emerging needs later in the year.

Organisations like food banks, outreach programmes and those helping the most vulnerable will be supported by the Positive Difference Fund.

Direct support for customers The water company, which looks after around six million customers and the largest region in England and Wales, has already stepped up its efforts to directly support customers. The new £1million Positive Difference Fund is in addition to an existing £1million Assistance Fund that customers who struggle to pay may be able to take advantage of.

Other support, available under the company’s Extra Care banner, includes discounted tariffs alongside flexible and affordable payment schemes. More than 300,000 customers each year are already helped this way.

The company also helps customers identify if they may be eligible for benefits they are not claiming. Anglian Water has already signposted customers to a potential £4.5m of unclaimed aid, with the average amount that customers may be entitled to exceeding the cost of the average water bill.

It is currently adding customers to its Priority Services Register faster than ever before, meaning they will get tailored help and special assistance should they need it.

Peter Simpson, Anglian Water’s Chief Executive, said: “This business is built on the communities it serves, so it’s absolutely right we extend our support back to them during this time of need.

“As key workers we’ve so far been able to keep all our colleagues employed, and we’ll do everything we can to maintain that. We know many thousands will not be so fortunate, and we sincerely hope this fund can go some way to helping them.

“The Positive Difference Fund may be new, but our desire to protect and improve the region we serve is not. We can clearly see it has never been more important for companies like ours to step up, so that’s exactly what we’re trying to do.”

Looking after colleagues The company has restated its commitment to its workforce: • It will continue with its Apprenticeship recruitment programme, arranging virtual interviews, resulting in 80 jobs being offered to start in October • All existing job offers and start dates will be honoured and full salaries paid, even if new employees are not yet able to start work • A one-off flat-fee payment to all colleagues will still be paid later this year • A fund to support colleagues in financial hardship will be brought forward later this month • The company is offering employees flexibility where they are supporting vulnerable family members, without any risk to their salary • Casual or Fixed Term Contracts that are due to end have been extended to May 31st, giving these workers an additional buffer

Backup for the supply chain Peter continued: “We employ around five thousand people, but more than double that number work in our supply chain. We’re doing all we can to extend our support to that workforce too, as we know how much we will need them when we emerge from the pandemic.”

Steps taken to support the supply chain include: • Reducing the time taken to make payments, releasing more than £5million in March alone • Helping to support and advise many small and medium-size suppliers with access to advanced procurement opportunities • Supporting staff within some supply chain companies who have been hit with pay reductions by their employer

Peter said: “I’ve been humbled by the sometimes heroic efforts of both the Anglian Water workforce, and those all across the region we look after, as they simply try to keep our networks running and our communities safe. We will continue to do all we can to support them.”

Details of how to apply for support from the Anglian Water Positive Difference Fund will be released shortly. Any customer who has difficulty paying their bill should contact the company as soon as possible on 0800 169 3630.  

Anglian Water turns on the tap with £1million fund for local communities • £1million Positive Difference Fund created to support local community organisations • New fund doubles the £1m already available to customers through the Anglian Water Assistance Fund • Builds on massive Extra Care direct support package assisting families financially hit by COVID-19 • Supply chain deals and enhanced payment terms keep thousands more in employment as key workers • Company will kick-start a fund to help employees and their families facing financial hardship • Restates commitment to workforce, continues with apprentice recruitment, honours all existing job offers Communities in the Anglian Water region are to receive a cash boost to fight the impacts of Coronavirus as the water company’s owners backed plans to establish a new £1 million community support fund. The Anglian Water Positive Difference Fund will be distributed through a locally appointed partner which has expertise in getting money quickly to areas in which it is most needed. Fifty per cent of the fund will immediately be made available to support community organisations on the front line of the battle against coronavirus, with a further fifty per cent released to meet emerging needs later in the year. Organisations like food banks, outreach programmes and those helping the most vulnerable will be supported by the Positive Difference Fund. Direct support for customers The water company, which looks after around six million customers and the largest region in England and Wales, has already stepped up its efforts to directly support customers. The new £1million Positive Difference Fund is in addition to an existing £1million Assistance Fund that customers who struggle to pay may be able to take advantage of. Other support, available under the company’s Extra Care banner, includes discounted tariffs alongside flexible and affordable payment schemes. More than 300,000 customers each year are already helped this way. The company also helps customers identify if they may be eligible for benefits they are not claiming. Anglian Water has already signposted customers to a potential £4.5m of unclaimed aid, with the average amount that customers may be entitled to exceeding the cost of the average water bill. It is currently adding customers to its Priority Services Register faster than ever before, meaning they will get tailored help and special assistance should they need it. Peter Simpson, Anglian Water’s Chief Executive, said: “This business is built on the communities it serves, so it’s absolutely right we extend our support back to them during this time of need. “As key workers we’ve so far been able to keep all our colleagues employed, and we’ll do everything we can to maintain that. We know many thousands will not be so fortunate, and we sincerely hope this fund can go some way to helping them. “The Positive Difference Fund may be new, but our desire to protect and improve the region we serve is not. We can clearly see it has never been more important for companies like ours to step up, so that’s exactly what we’re trying to do.” Looking after colleagues The company has restated its commitment to its workforce: • It will continue with its Apprenticeship recruitment programme, arranging virtual interviews, resulting in 80 jobs being offered to start in October • All existing job offers and start dates will be honoured and full salaries paid, even if new employees are not yet able to start work • A one-off flat-fee payment to all colleagues will still be paid later this year • A fund to support colleagues in financial hardship will be brought forward later this month • The company is offering employees flexibility where they are supporting vulnerable family members, without any risk to their salary • Casual or Fixed Term Contracts that are due to end have been extended to May 31st, giving these workers an additional buffer Backup for the supply chain Peter continued: “We employ around five thousand people, but more than double that number work in our supply chain. We’re doing all we can to extend our support to that workforce too, as we know how much we will need them when we emerge from the pandemic.” Steps taken to support the supply chain include: • Reducing the time taken to make payments, releasing more than £5million in March alone • Helping to support and advise many small and medium-size suppliers with access to advanced procurement opportunities • Supporting staff within some supply chain companies who have been hit with pay reductions by their employer

Peter said: “I’ve been humbled by the sometimes heroic efforts of both the Anglian Water workforce, and those all across the region we look after, as they simply try to keep our networks running and our communities safe. We will continue to do all we can to support them.” Details of how to apply for support from the Anglian Water Positive Difference Fund will be released shortly. Any customer who has difficulty paying their bill should contact the company as soon as possible on 0800 169 3630.  

Norfolk County Council are circulating a survey to butchers, green grocers and pharmacies across the county, to better understand the impact COVID-19 is having on their current and future business, and seek to ensure that appropriate support is put in place.

Norfolk County Council is working in partnership with business leaders and district authorities to support small local businesses, vital to the county’s resilience, amidst the current pandemic.

The Council are keen to hear from these crucial businesses involved in the supply of food and medicine about their ability to maintain these essential services throughout the pandemic and invite them to complete the survey.

Cllr Graham Plant, Deputy leader of Norfolk County Council and Cabinet Member for Growing the Economy said: “These businesses are at the sharp end of service delivery and are vital to the resilience of the county, particularly in rural communities.

“We want to hear about any challenges they face now, or may face in the future, as we’re keen to understand how the Council and other public bodies can help.” 

Chris Starkie, chief executive of New Anglia LEP, said: “This is a really challenging time for businesses and we’re working closely with local partners to provide support. Frontline businesses which provide the essentials which we all need are facing particular challenges around supply chains, social distancing guidelines and staffing so it is important that they receive the help they need to keep operating in our communities.”

Complete the survey here. 

The Government announced the Coronavirus Job Retention Scheme (“the Scheme”) on 20 March 2020, as part of the range of measures put in place to support businesses during the Covid-19 pandemic. The aim of the Scheme is to avoid redundancies by employers whose operations have been severely affected by coronavirus. The official guidance to the scheme for employers, and for employees confirms that employers can ‘furlough’ workers, which is an unknown term in UK Employment Law, but describes a situation where a worker remains employed but is not provided with any work.

Information for Employers:   1) Which businesses can use the Scheme?   Any UK organisation that had PAYE payroll in place by 28 February 2020 can make a claim under the Scheme. Eligible organisations can include businesses, charities, recruitment agencies (if they have agency workers on PAYE) and public authorities. The Scheme is due to be live by the end of April and has initially been put in place for three months, backdated to 1 March 2020, but can be extended.   2) Who can be furloughed?   Workers who were on an employer’s payroll for PAYE purposes as of 28 February 2020 can be furloughed, but this is likely to exclude many workers in the gig economy. The Guidance does not state that evidence that a worker would otherwise have been made redundant will be required, but it does say that “HMRC will retain the right to retrospectively audit all aspects of your claim”. Any worker whose employment was terminated after 28 February can be rehired and furloughed, but there is no obligation on employers to re-hire a worker whose employment has been terminated.   3) Does the Scheme cover workers on reduced hours?   No. A furloughed worker is someone who remains employed but who is not provided with any work. This means that the worker cannot undertake any duties which provide a service to or generate revenue for their employer whilst furloughed, although training can be undertaken.   4) Can workers who are on sick leave be furloughed?   The Guidance confirms that workers who are on sick leave, or self-isolating in accordance with the advice issued by Public Health England, and receiving statutory (or contractual) sick pay, can be furloughed.   5) What will the employee be paid during furlough?   Employers will be provided with a grant by the Government for workers who are furloughed, to cover 80% of workers’ wages, capped at £2,500 per month. Employers are not obliged to top up the difference but may decide to do so – if not then the workers would need to agree to the reduction in pay. The Guidance states that employers can claim an additional grant to cover associated Employer National Insurance Contributions (NICs) and minimum automatic enrolment employer pension contributions.   6) Can employers just tell employees that they are being furloughed?   In most cases, no. Many employment contracts will not have made provision for a worker to be laid off on this basis and therefore the employer will need to seek the worker’s agreement to vary their terms, particularly to reduce their pay.   7) How should employers select which workers to furlough?   In many cases employers who are operating at reduced capacity will need to select which workers to furlough. This could create problems if either too few or too many workers want to be furloughed. The Guidance does not set out how an employer should select the workers that it furloughs, but employers must remember that they will continue to be bound by general employment law, particularly discrimination.   8) Can workers come on and off furlough?   Yes. The Guidance states that while a worker must always be placed on furlough for a minimum period of three weeks, they can be placed on furlough more than once.   9) What records do employers need to keep?   The Guidance states that employers can only make a claim if they have provided workers with written confirmation that they are furloughed. It is therefore strongly recommended that a “Furlough Agreement” is put in place to cover the terms upon which the worker is furloughed.   10) Can employees take annual leave whilst they are furloughed? As yet, the official Guidance) does not make specific provision for this, but ACAS guidance and HMRC’s customer services team suggest that this will be possible and that it should be paid at 100% of normal salary. If this is correct, then it is assumed that the employer will have to top up the pay for such holiday from 80%, but at the time of writing, this is yet to be confirmed.   Information for Employees:   1) Who can be furloughed?   Workers who were on an employer’s payroll for PAYE purposes as of 28 February 2020 can be furloughed, but this is likely to exclude many workers in the gig economy. Any worker whose employment was terminated after 28 February can be rehired and furloughed, but there is no obligation on employers to re-hire a worker whose employment has been terminated.   2) Can you just work reduced hours?   No. A furloughed worker is someone who remains employed but who is not provided with any work. This means that you cannot undertake any duties which provide a service to or generate revenue for your employer whilst furloughed, although training can be undertaken.   3) Can you be furloughed if you are on sick leave?   The Guidance confirms that you can be furloughed, even if you are on sick leave or self-isolating in accordance with the advice issued by Public Health England and receiving statutory (or contractual) sick pay.   4) What will you be paid during furlough?   Employers will be provided with a grant by the Government for workers who are furloughed, to cover 80% of your wages, capped at £2,500 per month. Employers are not obliged to top up the difference but may decide to do so – if not then you would need to agree to the reduction in pay.   5) Can your employer just tell you that you are being furloughed?   In most cases, no. Many employment contracts will not have made provision for a worker to be laid off on this basis and therefore the employer will need to seek your agreement to vary your terms, particularly to reduce their pay. However, this is likely to be the more attractive alternative to redundancy.   6) Can you demand to be furloughed?   No. Under the Scheme, the decision to designate a worker as furloughed and claim the grant from HMRC can only be made by the employer. You do not have an explicit right to put yourself on furlough, even if you have caring responsibilities or cannot work from home.   7) How should employers select which workers to furlough?   If employers are operating at reduced capacity, they may need to select which workers to furlough. When selecting which workers to furlough, employers will be bound by general employment law, including discrimination in particular.   8) Can workers come on and off furlough?   Yes. The Guidance states that while you must always be placed on furlough for a minimum period of three weeks, you can be placed on furlough more than once.   9) Can you work elsewhere whilst you are furloughed?   The Guidance states that you can do volunteer work and/or undertake work for a new employer whilst furloughed, provided that your contract of employment allows you to work elsewhere. However, you cannot provide a service to or generate revenue for your employer or any organisation linked to your employer. This means that you could receive up to 80% of your wages from your existing employer, in addition to the wages you receive from a new employer.   10) Can you take annual leave whilst you are furloughed?   As yet, the official Guidance does not make specific provision for this, but ACAS guidance and HMRC’s customer services team suggest that this will be possible and that it should be paid at 100% of normal salary. If this is correct, then it is assumed that the employer will have to top up the pay for such holiday from 80%, but at the time of writing, this is yet to be confirmed.   For any Employment Law advice or more information on furloughing, contact Carla Gowing at carlagowing@hatchbrenner.co.uk

I regularly speak to importers and exporters in our region about the issues we’re all facing as Britain moves through the Brexit transition phase. Despite the fast-moving Covid-19 situation, we all need to keep an eye on the medium term. Here is the IES update on the areas I think are important for fellow professionals in the sector

Know your borders 

It is vital companies know the customs status and customs origin of your goods when they cross a border as this influences the type and cost of your import or export. 

Currently as the UK is still a member of the European Customs Union shipments are only classed as exports when they are being sent to a country that isn’t one of the other 27 EU member states. This is because it is only when the goods leave the EU to a rest of world (ROW) destination that they cross a ‘Customs Border’. 

All movements of goods through customs borders requires the submission of customs declarations and possible payment of taxes as they cross the border. 

There are currently 28 member states in the EU. Any movement of goods from the UK to one of the other 27 states is classed as an intra EU movement. Note that, as Turkey isn’t a full member of the EU, exports to Turkey require a customs declaration along with an additional document called an Admission Temporaire Roulette (A.TR), needed to support the non-payment of tax.

Understanding origin

One of the biggest issues I encounter for my clients is when they are exporting to countries who have free trade agreements with the EU. They are frequently asked to provide with a long term declaration of Preferential Origin or an EUR1 document.

The issue is that there are two types of origin, Preferential & Non-preferential origin. Non-preferential origin is defined as ‘nationality’ product i.e. where the products is made. Whereas Preferential Origin allows for products that aren’t grown or wholly sourced in the country of supply, comes from establishing whether the product has undergone sufficient processing for it to meet the Origin rules set out in trade agreements between the country of supply and the final destination of the finished goods. The trade agreements which are all different clearly lay out on a product by product basis how much ‘originating components’ must be used in the manufacture of the finished product for it to change origin.

For example: a UK company ‘Widgets are Us’ designs WidgetA made from components sourced from multiple suppliers all over the world which they assemble into WidgetA in their UK warehouse. When they sell WidgetA they can label affix a ‘Made in the UK’ label. However, if they want to sell WidgetA to a country like South Korea, and benefit from the trade agreement in place between the EU & South Korea allowing goods with an EU origin to be imported into South Korea duty free, they will have to perform a calculation to ascertain whether WidgetA has undergone sufficient processing giving it a customs preferential origin of the EU other wise duty will need to be paid when it’s imported into South Korea.

Customs status

The customs status of your goods depends on whether or not import duty and VAT has been paid on the products when they entered the EU/UK. Also, whether you received a reduction under a free trade agreement between the country of supply and the EU.  

Other important information exporters must know includes your trading terms with customers, i.e. who will be the importer or exporter of record, and who is liable for transportation costs, duty and VAT. This is vital as there are stringent rules that must be met when zero rating invoices on exports, as the exporter of record is liable for VAT on non-compliant exports. 

The accepted trading terms are known as Incoterms® which the ICC have revised and relaunched for 2020. Incoterms guide how the risks and costs associated with international trade should be split between the vendor and customer. They also outline who will be the exporter of record, and who is responsible for and who pays for transportation, insurance and taxes.

Brexit proposals

After the Brexit transition period ends, our borders will shrink from the entire EU to just the UK and Northern Ireland. Currently the UK Government proposes, following the transition period, that companies will apply EU tariffs on import and if goods are released to the UK and there is a duty differential they can submit an adjustment to account for any duty over or underpayment.

There is also a suggestion that for intra EU movements, companies will be required to submit a document similar to the A.TR which they propose calling A.UK/NI.  

All of this detail has yet to be agreed.

We can expect further developments during the transition phase, we will endeavour to keep you updated. As always, please call or email me with comments or questions, we’re always happy to discuss individual issues.

Incoterms info here

List of EU countries here