Licensed Trade – Coronavirus update – important information for your business

The licensed trade will be one of the worse hit areas countrywide and we are here to answer your questions and provide advice in what is going to be a challenging time for all going forward.

 What kind of things can you do?  We are going to be providing updates daily with advice and guidance on useful areas to consider now.  Our experts are also on hand to assist with your queries.

Staff:

There could be temporary solution to the problem of no or less work.  Speak to staff and try to consider with them if there are any alternatives to layoffs and redundancies. Laying off employees means that the employer provides employees with no work (and no pay) for a period while retaining them as employees.

Consider staff contracts – some contracts provide for short-time working.  That means providing employees with less work (and less pay) for a period while retaining them as employees.

Consider whether staff would agree to take annual leave or work shorter hours than they may be contracted to?  Are any staff due to go on maternity leave, parental leave or retiring and could that be brought forward?  If staff wish to take time off to look after children or older dependents, could that be agreed on the basis of unpaid leave?  Check your contracts before you speak to employees as, if employees are laid-off or put on short-time working where you do not have the contractual right to do so, then the employer could be in fundamental breach of contract and your employee could resign and claim constructive dismissal.  For more information see the employer Q&A on our website – https://gilsongray.co.uk/insights/coronavirus-covid-19-qa-for-employers/

Financial support:

A new, temporary Coronavirus Business Interruption Loan Scheme is to be made available from the British Business Bank offering loans of up to £5 million for SMEs through the British Business Bank. It will facilitate business finance for smaller businesses with a turnover of no more than £41 million that are viable but cannot obtain finance because they have insufficient security to meet the lender’s normal requirements.  The scheme will provide accredited lenders with a government-backed 80% guarantee against the outstanding loan balance. Lenders may look for the remaining 20% from the borrower so businesses should be aware of the need for some security.  The government will not charge businesses or banks for this guarantee. This includes small business grant funding of £10,000 for all business in receipt of small business rate relief or rural rate relief.  There is also grant funding of £25,000 for retail, hospitality and leisure businesses with property with a rateable value between £15,000 and £51,000.  Please contact Joanna to discuss this if you need assistance in applying or more information.

Chancellor Rishi Sunak announced a one-year suspension on business rates for many hospitality and entertainment venues in England.  Scotland is hoping to see similar benefit from business rates assistance direct from the Scottish Government.  There is up to £360 million extra being provided to the Scottish Government because of urgent business support measures in the Budget, on top of £640 million based on other spending. We are waiting for updates on this.  The rates relief in England is specifically targeted at retail hospitality and leisure sectors and there have already been calls for similar measures to be put in place in Scotland.

Support for businesses paying tax:

All businesses and self-employed people in financial difficulty or with outstanding tax liabilities could be eligible agree a payment plan through HMRC’s Time To Pay service. These arrangements are agreed on a case-by-case basis depending on the business or individual’s financial situation.  More information and assistance should be available on HMRC’s dedicated helpline on 0800 0159 559.

Insurance:

Many insurers and brokers are suggesting there is no such cover in place but some policies do have this.  The UK Government has confirmed where policies do provide pandemic and/or government-ordered closure then those businesses should be covered.  On 17th March the government and insurance industry confirmed that advice to avoid pubs, theatres and similar leisure and licensed trade businesses is sufficient to make a claim.  Insurance policies differ significantly, so businesses are encouraged to check the terms and conditions of their specific policy carefully and contact their providers.

Get in touch for more info …

While the Chancellor’s proposals are hopeful, there may not be immediate funding available.  Before they can progress funding, banks and other lenders will need to ensure they comply with the Financial Conduct Authority lending rules.  Actual availability of grants and borrowing may therefore take longer than hoped.  If you need urgent access to grants or funding, please contact us.  We are in ongoing discussions with various lenders as to the practicalities and timescales of such funding.  Joanna’s contacts details are landline 0141 370 8116 or mobile 07747 653417 and email on jmillar@gilsongray.co.uk

The information and opinions contained in this blog are for information only. They are not intended to constitute advice and should not be relied upon or considered as a replacement for advice. Before acting on any of the information contained in this blog, please seek specific advice from Gilson Gray.

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