Grants for businesses

With a third national lockdown in force across the country, the government announced yesterday the introduction of one-off top up grants for retail, hospitality and leisure businesses, worth between £4,000 and £9,000 per property to help businesses through to the Spring. The one-off grants will work as follows:

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

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

• £9,000 for businesses with a rateable value of over £51,000

It has also been confirmed that a further £594 million discretionary fund will be made available for Local Authorities to support other businesses who are not eligible for the grants but that may be affected by the restrictions. To access this support, businesses should apply to their Local Authorities.

The new one-off grants come in addition to existing business support schemes, including grants up to £3,000 for closed businesses, and up to £2,100 per month for impacted businesses once they reopen.

Extension of the Furlough Scheme

The government’s Coronavirus Job Retention Scheme (Furlough Scheme) remains open to new entrants and has been extended until the end of April 2021. Under the scheme, the government will pay up to 80% of an employee’s normal salary, capped at £2,500 a month.

There is no requirement for employers to contribute to wages, but they are required to pay NICs and pension contributions. Flexible furlough continues to operate, allowing employees to work reduced hours and receive a furlough grant for the hours that they don’t work.

When claiming the grant for furloughed hours, employers will need to report and claim for a minimum period of seven consecutive calendar days. For flexible-furlough, employers will need to report the number of hours the employee works and the hours they would usually be expected to work in a claim period.

For worked hours, employees will be paid by their employer subject to their employment contract and employers will be responsible for paying the tax and NICs due on those amounts.

The scheme is open to all employers with a UK bank account and PAYE schemes. Employees are eligible provided they were on their employer’s PAYE payroll before midnight on 30th October 2020. This means a Real Time Information (RTI) submission notifying payment for that employee to HMRC must have been made on or before 30th October 2020.

As with the original furlough scheme, employees can be on any type of contract, including zero-hour and casual worker agreements.

Under the rules of the scheme, employers will need agreement from employees to be placed on furlough. Employers must ensure that any agreement is consistent with employment, equality and discrimination laws and a written record of the agreement must be kept for at least five years.

If you require any assistance in preparing suitable furlough agreements or require advice on whether your existing furlough agreements are still compliant, please get in touch with our Employment Group on 0118 977 4045 or at employment@herrington-carmichael.com.

This reflects the law at the date of publication and is written as a general guide. It does not contain definitive legal advice, which should be sought as appropriate in relation to a particular matter.