:format(webp)/cdn.vox-cdn.com/uploads/chorus_image/image/66579942/central_16.0.jpg)
With the news updating daily, often multiple times a day, it’s become important to compile the information for all employers and workers in the hospitality industry in one concise article. This is designed to keep restaurants, and their staff, up to date.
So let’s break it down.
Please note, this information is accurate as of 27 March. This list will be updated as relevant information becomes available.
What do restaurants, cafes, pubs, and bars have to do?
As of 20 March, the government officially instructed restaurants, bars, and pubs to close for dine-in services.
Providing takeout and operating delivery services is permitted, as long as employees adhere to public health guidelines and social distancing measures. The government has completely relaxed planning regulations to allow food businesses to offer takeaway.
What COVID-19 support is there for restaurant employees?
The Coronavirus Job Retention Scheme
For workers on PAYE contracts:
- This scheme will provide a grant that will cover up to 80 percent of a worker’s salary, to a maximum of £2,500 per month per worker (that is equal to a £30,000 annual salary). This is intended to keep workers paid and in jobs.
- Information has not yet been released clarifying if workers must be fully “furloughed.” I.e.: whether or not employees cannot be working at the business during the period that their salary is subsidised by the government.
- This means employers will be able to claim for 80 percent of a staff member’s salary. This means staff members might take a 20 percent pay cut, if the employer is unable to gather the remaining money to make up the full salary.
- These payments can be backdated to 1 March; this scheme will be in place for a minimum of three months.
- These grants cover all sectors, including hospitality.
- The first grants will be paid “within weeks.” (Eater is reaching out to workers about how these measures are working out in practice over the coming weeks.)
Information for those with insecure contracts/part-time work
- Rishi Sunak said the scheme will cover “everybody who is on the PAYE system through a company.”
- So, this scheme will cover any employee who is on payroll (and who is taxed at source, through their paycheck.)
- Workers will need to contact employers to confirm, but even without a contract, the scheme should cover all workers on a payroll.
- Those working on zero-hour contracts should be open to this scheme but it’s unclear how the wage will be calculated. It’s likely this will be calculated based on the hours worked in February 2020.
More information about this is coming out all the time and at this point, this scheme looks as though it will only cover pre-existing payroll contracts. While this is a hefty package from the government, it is still up to employers to keep contracts in place and not lay off staff. It’s always best for employees to contact employers to determine their particular situation.
How does COVID-19 impact freelancers and the self-employed?
The chancellor announced financial support measures for the self-employed on 26 March. The self-employed will be able to claim a grant of 80 percent average of monthly profits, based on earnings over last 3 years, to the value of up to 2,500 per month.
- It will be open to anyone with trading profits up to £50,000, who makes the majority of their income as a self-employed person.
- Only those who are already self-employed and have a 2018-2019 tax return will be able to claim, but anyone who missed the tax return has been granted an additional 4 weeks to submit it, from 26 March.
- The scheme will be available in June and the grant will be paid into bank accounts.
- Anyone without three years of accounts will have any available accounts looked at for eligibility.
- The scheme will be available for minimum 3 months and reviewed at the end of this period
- Self Employed People can also now access the Business Interruption Loans — 12 month interest free in case funds are needed before June or can access Universal Credit, outlined below.
- Those without sufficient time operating as self employed and without sufficient accounts will be asked to use the welfare system.
- The minimum allowance required to apply for universal credit has been removed making it accessible for the self-employed. This will effectively allow freelancers to claim statutory sick pay. For the next 12 months, the yearly universal credit allowance will be increased by £1,000.
- HMRC will contact eligible taxpayers once the scheme is operational. People do not need to apply themselves, but there is a tax helpline available.
- The current government subsidy for freelancers is limited in comparison to the package for payroll workers. While more information is likely to be released this week, here are some resources and support groups:
- CounterTalk freelance/temp list for ad hoc job opportunities
- Marguerite London job board
- Facebook support group: “Anti Viral Work for Freelancers”
- (USA centric) resource list and article database
What about employers affected by novel coronavirus?
Small business grants for COVID-19
- Small businesses with a “rateable value” of less than £15,000 qualify. Search for a property’s value to confirm.
- This grant is for any small business. It is not specific to hospitality.
- Businesses will be eligible for a cash grant up to £10,000. This was recently increased from £3,000 so the numbers are changing all the time as the situation develops.
- Businesses don’t “apply” for this — local authorities will get in touch, so keep checking the mailbox.
- Businesses can contact local authorities for updates on the timeframe of the scheme roll out, but unfortunately this is likely to be a waiting game. Funds should be available from April.
Small and medium business grants for COVID-19
- Small- to medium-sized business with a rateable value between £15,000 – £51,000. Search for a property’s value to confirm.
- This grant has been announced to specifically cover retail, hospitality, and leisure.
- Businesses will be eligible for a cash grant up to £25,000.
- Businesses don’t “apply” for this — local authorities will get in touch so keep checking the mailbox.
- Businesses can contact local authorities for updates on the timeframe of the scheme roll out, but unfortunately this is likely to be a waiting game. Funds should be available from April.
Other business grants for COVID-19
- Facebook has pledged $100 million to support small businesses. A lot of this is still to be confirmed, but sign up for information on the Facebook grants hub here.
How is novel coronavirus changing VAT and business rates?
Business Rates
- Business rates for small businesses with a rateable value under £15,000 are already being scrapped. The government has also announced an 100 percent business rate holiday for everyone for 12 months, which can be added into financial statements.
VAT payments
- A VAT holiday will be in place until the end of June, meaning restaurants will be able to free up funds to put back into their business.
- The collection of VAT from the next three months will be delayed and will not be collected until the end of the next financial year in April 2021.
- Contact the tax helpline for more information.
Further COVID-19 support for businesses
- The government has confirmed that their guidelines will allow businesses with sufficient cover to make a business interruption insurance claim, but this will be applicable to very few policies, because of the specific nature of this interruption, i.e. a pandemic.
- RSVP is just one business that has made selling restaurant gift vouchers simple for immediate cashflow.
- Statutory sick pay compensation will be available for businesses with fewer than 250 employees as of 28 February 2020. The government will refund two weeks per staff member and no doctor’s note is required, but businesses will need to keep track of absences.