General Business Information: Company & Commercial Updates

On 22 February 2021, the UK government published its COVID-19 Roadmap, which sets out the plan for easing lockdown restrictions in England, in four steps. (View the full roadmap here

The earliest opening dates of relevance to businesses include the following:

• 29 March 2021. Outdoor sports facilities such as tennis and basketball courts, and open-air swimming pools.
• 12 April 2021. Non-essential retail businesses; personal care premises such as hairdressers and nail salons; public buildings, including libraries and community centres; indoor leisure facilities such as gyms (but only for use by people on their own or in household groups); most outdoor sites and outdoor hospitality venues (including restaurants and pubs, table service only, but no need for a substantial meal, and no curfew); zoos, theme parks, and drive-in cinemas; and self-contained accommodation such as campsites and holiday lets, where indoor facilities are not shared with other households.
• 17 May 2021. Most businesses in all but the highest risk sectors; indoor hospitality venues (including restaurants and pubs, table service only, but no need for a substantial meal, and no curfew); indoor entertainment venues such as cinemas and children’s play areas; the rest of the accommodation sector, including hotels, hostels and B&Bs; and some larger performances and sporting events in indoor and outdoor venues, with the limits in each case varying according to the size of the venue.
• 21 June 2021. The government hopes to remove all legal limits on social contact, and in particular to reopen remaining premises, including nightclubs, and ease restrictions on large events and performances.

Before taking each step, the government will review the latest data on the impact of the previous step against four tests. The tests are that the vaccine deployment programme continues successfully; vaccines are sufficiently effective in reducing hospitalisations and deaths in those vaccinated; infection rates do not risk a surge in hospitalisations which would put unsustainable pressure on the NHS, and the government’s assessment of the risks is not fundamentally changed by new variants of concern.

Progress will also be subject to positive results from four reviews: into the time that will be needed to maintain social distancing and face masks; the resumption of international travel; the potential role of COVID-status certification in helping venues to open safely; and the safe return of major events.

The Chancellor of the Exchequer will set out details of continuing business support measures in the Budget on Wednesday 3 March 2021.

The Chief Secretary to the Treasury, Steve Barclay, has announced a local lockdown business support scheme.  Businesses in England required to close due to local lockdowns or targeted restrictions will now be able to receive grants worth up to £1,500 every three weeks. To be eligible for the grant, a business must have been required to close due to local COVID-19 restrictions. Any businesses still closed at a national level (such as nightclubs) will not be eligible.

Payments are triggered by a national decision to close businesses in a high incidence area. Each payment will be made for a three-week lockdown period. Each new three-week lockdown period triggers an additional payment. Further details include the following:

• If a business occupies a premises with a rateable value less than £51,000 or occupies a property or part of a property subject to an annual rent or mortgage payment of less than £51,000, it will receive £1,000. If a business occupies a premises with a rateable value of exactly £51,000 or above or occupies a property or part of a property subject to an annual rent or mortgage payment of exactly £51,000 or above, it will receive £1,500.
• Local authorities will also receive an additional 5% top-up amount of business support funding to enable them to help other businesses affected by closures which may not be on the business rates list. Payments made to businesses from this discretionary fund can be any amount up to £1,500 and may be less than £1,000 in some cases.
• Local authorities will be responsible for distributing the grants to businesses in circumstances where they are closed due to local interventions. Further eligibility criteria may be determined by local authorities.
• As with other COVID-19 business grants, local grants to closed businesses will be treated as taxable income.

For more information visit here

On 8 July 2020, the Chancellor of the Exchequer delivered the Summer 2020 Economic Update, which included the Plan for Jobs 2020.  Key environmental announcements are:

• A £2 billion Green Homes Grant, which will be a new voucher scheme to help households towards the cost of energy efficiency upgrades in 2020-21, such as insulation, double-glazing and other approved measures. The Green Homes Grant will provide at least two-thirds of the cost of energy-saving home improvements for homeowners and landlords up to £5,000. The scheme will fully fund energy efficiency measures worth up to £10,000 for households on the lowest incomes. The government anticipates this could upgrade over 600,000 homes in England, support over 100,000 green jobs and strengthen the supply chain for energy efficiency measures in buildings.
• £1 billion invested over the next year in a Public Sector Decarbonisation Scheme, which will offer grants to public sector bodies (including schools and hospitals) to fund both energy efficiency and low carbon heat upgrades. The government’s Clean Growth Strategy Clean set a target for the government to halve greenhouse gas emissions from the public sector by 2032.
• A £40 million Green Jobs Challenge Fund for environmental charities and local authorities to create and protect 5,000 jobs in England. The jobs will involve improving the natural environment, including planting trees, restoring habitats, clearing waterways, and creating green space for people and wildlife.
• £100 million of new funding for researching and developing Direct Air Capture (a technology that captures carbon dioxide from the air).
• £10 million of funding available immediately for the Automotive Transformation Fund, to support a first wave of innovative R&D projects to scale up manufacturing of the latest technology in batteries, motors, electronics and fuel cells. The government is also calling upon industry to put forward investment proposals for the UK’s first “gigafactory” and supporting supply chains to mass manufacture cutting-edge batteries for the next generation of electric vehicles, as well as for other strategic electric vehicle technologies.
• £40 million to improve the environmental sustainability of the courts and tribunals estate in England and Wales, investing in initiatives to reduce energy and water.
• A Social Housing Decarbonisation Fund, to help social landlords improve the least energy-efficient social rented homes. This will start with a £50 million pilot project in 2020-21.

The Chancellor explained that the Plan for Jobs is the second phase of the government’s three-stage plan to secure the UK’s economic recovery from coronavirus. The first stage was the government’s initial support package (which included the furlough scheme and business loans schemes). The government will set out its third phase in autumn 2020, with measures to support the UK’s longer-term recovery through a Budget and Spending Review. These will set out further plans, including to support innovation and growth-enhancing infrastructure with a National Infrastructure Strategy.

For more information see the plans for jobs document

and the Chancellors plan

The Chancellor Rishi Sunak has given his economic update statement and has announced amongst other things:-

• Budget and spending Review to come in the Autumn
• Job Retention Scheme to wind down flexibly and gradually towards end of October
• Job Retention Bonus – businesses bringing people back from furlough and keeping them employed beyond January 2021 will receive a £1,000.00 bonus per employee
• New Kickstart Scheme to be introduced to help get people into work
• New £2billion Green Homes Grant to make homes more energy efficient and create local jobs, up to £5,000.00 per household to cover up to two thirds of the cots, save for low income households where full amount may be covered.
• SDLT cuts – the Stamp Duty Land Tax (SDLT) threshold to increase to £500,000.00 until 31^st March 2021 – meaning no SDLT on residential transactions below £500,000.00 until 31^st March 2021.  These changes effective immediately
• Hospitality and Entertainment Sectors – Food, accommodation and attractions will see VAT reduced from 20% to 5% from 15^th July 2020 until 12^th January 2021
• To encourage customers to return to restaurants, cafes and pubs, for the month of August an Eat Out Help Out Voucher for 50% off upto £10 per head discount for everyone including children, to be used Monday – Wednesday throughout August, for participating businesses who must register first.  The 50% discount will be covered by the Government.

Follow our social media pages for more details as and when it appears

Restaurants, pubs, bars and takeaway services are able to re-open from the 4th July amidst Government recommendations and regulations. Businesses are being asked to support the NHS Test and Trace response by collecting contact details of customers and retaining a temporary record of all customer and visitor contact details for 21 days, but with little guidance so far on what information is required, how the information will be used and the surrounding liability is as yet unclear.

Contact details such as names, e-mail addresses and phone numbers all constitute Personal Data and must be collected in compliance with GDPR. Businesses which previously may not have had to be too concerned about the complexities of data protection will now have to urgently bring their processes into compliance. There are some key first steps that businesses should consider.

Transparency

Ensure that customers are aware of what information is being collected, how that information is being processed (including if it is going to be shared with any third parties, such as the NHS contract tracers) and their rights in regards to that information. Privacy notices must be clear and accessible by your customers.

Lawful basis for processing

If you are relying on customers’ Consent to collect the Personal Data, are they able to refuse and/or withdraw their consent at any time? If customers can only access your venue on disclosing contact details, you may not be able to rely on Consent and so must consider a different lawful basis.

How can you use the information?

You can only use the personal data for the purpose for which it is collected. If the purpose is to support the NHS Test and Trace response, you cannot also use the contact details for other purposes such as marketing or sharing with a third party.

Keep it safe

You will likely be collecting a large amount of contact information that your business may not be accustomed to holding. You must ensure that you have in place technical and organisational measures to protect the personal data you collect from any misuse or unlawful access. As well as technical safeguards you must ensure that your staff have training on confidentiality and security obligations in relation to the information collected.

Further guidance is expected from the government and the Information Commissioner’s Office on how this can be done efficiently and in line with data privacy laws. Businesses should assist with NHS Track and Trace requests if received.

The Law Society has published a further amended version of its position on the use of virtual execution and e-signatures during the COVID-19 pandemic.

The note now includes tips on how to operate in practice, which include:

• Speak to the lawyers on the other side of any transaction to ensure that there is clear agreement on how to manage the transaction.
• Consider what steps it is desirable to take to verify the identity and authority of each person signing beyond that which is required by law, including the anti-money laundering regime. How best to do this may depend on common practice in the relevant area or specific regulatory requirements. For example, on certain transactions solicitors may be involved in checking the identity of a signatory, the authenticity of a signature and/or whether a document has been properly approved. On other transactions the identity, authenticity and approval can be assumed. The use of electronic signatures will not change this.

If authenticity cannot be assumed, practitioners may wish to use additional and objective sources of verification. This could include using video or photographic evidence. One technique that has been used is to make a live recording, which is then shared with all the parties as soon as possible.

• Ensure the evidence is immediately to hand on file in a timely and accessible manner. This may include taking screen shots.
• Use electronic means to report back to all parties that the transaction has closed.
• Even if performed electronically, the witness must be physically present when a deed is executed by or on behalf of the maker.

It is possible to demonstrate physical presence while also maintaining social distancing with appropriate safeguards, although there are practical challenges. When operating on the extremities of what may reasonably be considered to constitute presence, practitioners should collect clear evidence of presence, such as a video recording (subject to getting appropriate data protection rights consents).

Read more here

On 23 June 2020, HMRC updated its guidance on notifying it of a decision to exercise the option to tax (option) during the COVID-19 pandemic.

On 14 May 2020, HMRC had announced that the deadline for notifying it of a decision to exercise the option had been temporarily extended to 90 days (rather than the usual 30 days) from the date on which the decision was made. The extended time limit was stated to apply if the decision was made between 15 February 2020 and 31 May 2020. This was further extended on 27 May 2020 to decisions made between 15 February 2020 and 30 June 2020.

Under the updated guidance, the extended deadline for notification applies to decisions made between 15 February 2020 and 31 October 2020.

As always it is imperative you take advice from your accountant and financial advisors before making any decisions about whether to exercise an option to tax.

Read the latest update here

On 23 June 2020, the Prime Minister announced the further easing of lockdown measures in England to come into effect on 4 July 2020.

The relaxations announced by the Prime Minister include allowing:

• Numerous venues in the hospitality sector to reopen, including pubs, restaurants, hotels and campsites. Indoor hospitality will be limited to table service and the Prime Minister explained that venues will have to collect contact details from customers to facilitate testing and tracing. Shared accommodation facilities must be cleaned properly.
• Some leisure facilities and tourist attractions to reopen provided they can do so safely, including outdoor gyms and playgrounds, cinemas, museums, galleries, theme parks and arcades. However, nightclubs, soft-play areas, indoor gyms, swimming pools, water parks, bowling alleys and spas will be unable to reopen yet.
• Libraries, social clubs and community centres to reopen provided they can do so safely. Places of worship may reopen for prayer and services, including weddings with a maximum of 30 people, all subject to social distancing.
• Hairdressers to reopen, subject to the wearing of protective visors and other appropriate precautions.
• Members of two separate households to gather in any setting, including indoors. It need not be the same two households each time.

The Prime Minister also announced that the government would be amending its guidance that people should keep two metres apart. The guidance will say that people should remain two metres apart or, alternatively, a distance of “one-metre plus”. This means keeping a metre apart, while taking other precautions, such as wearing face coverings, using hand sanitiser and avoiding face-to-face seating. The amended guidance will also take effect from 4 July.

The Prime Minister said that from now on the government would be asking people to follow guidance on social contact instead of legislation.

The government has published updated guidance to help businesses in different sectors to operate in accordance with the new social distancing restrictions (view that full guidance here

This includes new guidance for people working in the “visitor economy”, meaning hotels and other guest accommodation, indoor and outdoor attractions and business events and consumer shows (read more here

The changes will apply in England only.

With reports of a major increase in liquidations in March 2020 businesses are understandably concerned about the increased risk of insolvency as a result of the Coronavirus pandemic.

On 28 March 2020, Business Secretary Alok Sharma announced changes to the Insolvency Rules in England and Wales, designed to allow companies to continue trading and keep workers employed, whilst undergoing a rescue or restructure process.

The key changes include a temporary suspension of wrongful trading provisions together with a new restructuring plan and moratorium for companies undergoing a restructuring process.

Wrongful trading provisions have been temporarily and retrospectively suspended, for an initial period of three months, from 1 March 2020. This gives company directors a potential lifeline by allowing them the opportunity to continue trading, without the threat of being held personally liable for any net shortfall to creditors, in circumstances where they knew, or should have known, the company was likely to become insolvent. However, directors still need to be prepared to evidence any action taken is reasonable and in the best interests of their company. In addition they should be aware that no changes are proposed to the rules relating to transactions at an undervalue or preferences. 

New legislation will also implement plans previously consulted on in 2018, to bind creditors to restructuring plans and prevent creditors from applying for administration orders, or petitioning for the winding up of a company, whilst the company seeks a rescue/restructure. The legislation will allow companies to continue to access the goods and services required to continue trading and will provide much needed breathing space to directors seeking to avoid insolvency as a result of COVID-19.

It remains to be seen whether the Business Secretary has gone far enough and whilst legislation has not yet been passed to implement the restructuring plan and moratorium, directors have been provided with much needed reassurance with the suspension of wrongful trading provisions, allowing them to try and navigate these unchartered waters.

HMRC has published an updated guidance on it’s CJRS. There are many unanswered questions, however the updated guidance does answer a few.

This includes:

• An express allowance that employees can start a new job when on furlough leave – this means that they could, theoretically, receive a Furlough Leave payment for their old salary plus 100% salary for their new job.
• A clarification that employers can reclaim 80% of compulsory commission payments in relation to commission but cannot reclaim  for non-monetary benefits (e.g. the value of health insurance or a car).
• Company directors can be furloughed provided they perform only their statutory duties – although the guidance fails to specify what “statutory duties” includes.
• Employees can be furloughed multiple times which allows for the rotation of furloughed employees. 

HMG has announced a new measure aimed at providing relief for UK companies by temporarily suspending wrongful trading liability during this unprecedented period. 

Wrongful trading makes it an offence for a company director to continue to trade if they know the business is unable to avoid going into liquidation. 

The measure will enable company directors to continue to pay staff and suppliers, even where there are concerns the company could become insolvent,  but will not relinquish the other duties that all directors are still required to fulfil. 

Speak to Andrew Kerr, Kevin Rogers,David Farmer, for more information.