The Three-tiers of Lockdown- What it means for businesses
The coronavirus pandemic is showing no signs of slowing down. This week has seen various announcements such as the three-tiers of lockdown in England which came into effect on 14th October, along with Scotland also reportedly considering a tier system of enhanced lockdown measures.
In addition to this there are various ‘circuit breaker’ lockdowns being introduced in Northern Ireland and Wales. All in all, it is fair to say that businesses are facing tougher challenges and finding it increasingly difficult to plan ahead.
In this article we outline what those restrictions are, what they mean for businesses and we round up the existing financial support available.
What is the new three-tier lockdown system?
- Medium- National restrictions remain in place, namely:
- All businesses and venues can continue to operate, in a COVID-19 Secure manner, other than those that remain closed in law, such as nightclubs.
- Certain businesses selling food or drink on their premises are required to close between 10pm and 5am.
- Businesses and venues selling food for consumption off the premises can continue to do so after 10pm as long as this is through delivery service, click-and-collect or drive-thru.
- Schools, universities, and places of worship remain open
- Weddings and funerals can go ahead with restrictions on the number of attendees
- Organised indoor sport and exercise classes can continue to take place, provided the ‘Rule of Six’ is followed
- People must not meet in groups larger than 6, indoors or outdoors
- High- the following additional measures are in place:
- People must not meet with anybody outside their household or support bubble in any indoor setting, whether at home or in a public place
- People must not meet in a group of more than 6 outside, including in a garden or other space.
- People should aim to reduce the number of journeys they make where possible. If they need to travel, they should walk or cycle where possible, or to plan ahead and avoid busy times and routes on public transport.
- Very High– the following additional measures are in place:
- Pubs and bars must close and can only remain open where they operate as if they were a restaurant – which means serving substantial meals, like a main lunchtime or evening meal. They may only serve alcohol as part of such a meal.
- Wedding receptions are not allowed
- People must not meet with anybody outside their household or support bubble in any indoor or outdoor setting, whether at home or in a public space. The ‘Rule of Six’ applies in open public spaces like parks and beaches.
- People should try to avoid travelling outside the ‘Very High’ area they are in, or entering a ‘Very High’ area, other than for things like work, education, accessing youth services, to meet caring responsibilities or if they are in transit.
- People should avoid staying overnight in another part of the UK if they are resident in a ‘Very High’ area or avoid staying overnight in a ‘Very High’ area if they are resident elsewhere.
For guidance on the lockdown restrictions in Northern Ireland please check here.
In Scotland, at the time of writing it is understood that First Minister Nicola Sturgeon is considering a 4-tier lockdown, however further guidance on the current restrictions in Scotland can be found here.
For guidance on the current lockdown restrictions in Wales please check here.
What is a ‘circuit breaker’?
Also referred to as a mini lockdown, this would prevent people from gathering in places like pubs, clubs and leisure facilities. The aim is to reduce the spread of new infections whilst avoiding the full national lockdown as experienced across the UK in March.
What should businesses be doing to prepare?
- Working from home
The lockdown tiers and circuit breakers will not make much difference if any. The advice remains if employees can work from home they should. If they cannot work from home, none of the above restrictions will prevent employees from attending their place of work, as long as they are covid-secure.
- Work-related travel
Again, irrespective of the restrictions, at the present time even those in very high-risk areas are still permitted to travel for work.
It is understood that even if specific parts of the UK impose bans on visitors from high risk areas, there will be exemptions for people who need to travel for work purposes.
What are the options for businesses needing to close?
This will mainly affect the already badly hit hospitality, events and leisure sectors. If you need to close, having had to close previously, you are likely to have already used the furlough scheme. This scheme remains open until the end of October.
You can use the scheme on a full-time (employee working no hours) or part-time basis (using flexible furlough where employee work some but not all their contractual hours).
Please see our previous articles on the furlough scheme:
Please note that with effect from 1st October 2020, the government contributions under the scheme reduced to 60% of wages up to a cap of £1,875 for the hours an employee is on furlough.
Employers will pay ER NICs and pension contributions and top up employees’ wages to ensure they receive 80% of their wages up to a cap of £2,500, for time they are furloughed.
What happens after October for businesses legally required to shut?
The Government announced that with effect from 1st November 2020 it will introduce the Job Support Scheme (JSS). Please see last weeks article for more details here.
UPDATE! Since the JSS was introduced the Chancellor announced that for businesses who are forced to close the JSS scheme will be expanded. These additional support measures include:
- The government will pay two thirds of employees’ salaries to protect jobs over the coming months (or 67%), up to a maximum of £2,100 a month.
- Cash grants for businesses required to close in local lockdowns are increased to up to £3,000 per month
- Employers will not be required to contribute towards wages and only asked to cover NICS and pension contributions
Businesses are eligible as follows:
- Businesses will only be eligible to claim the grant while they are subject to restrictions
- Employees must be off work for a minimum of seven consecutive days
Local Restrictions Support Grant Scheme
Businesses in England can receive up to £3,000 per month and are eligible for payment after two weeks of closure. It can be claimed alongside the JSS. Wales, Scotland and Northern Ireland will receive increased funding should their Administrations implement something similar.
Job Retention Bonus
This is a £1000 bonus available to UK businesses (whether they have had to close again or not) for each member of staff who:
- was furloughed and for whom their employer claimed through the furlough scheme
- has been in employment continuously between November 2020 and January 2021
- is NOT on notice of redundancy
- has received at least £1560 over the three-month period
- has had all their payments between 6 November 2020 and 5 February 2021 reported to HMRC via Real Time Information (RTI)
Businesses must claim the bonus between 15 February 2021 and 31 March 2021, employers do not have to pay this money to their employee.
For more information see here.
What if the government funding is not enough to avoid having to make redundancies?
If the above measures will not support your business sufficiently, irrespective of the lockdown restrictions imposed in your local area, then our experts can support you with having to make redundancies or implement short-time or temporary lay-off.
Please see our previous article on redundancy planning here.
And finally…. here at Avensure, we work with businesses of all sizes, with expertise in supporting SME’s. We also support businesses across all sectors and have extensive experience in supporting those sectors hardest hit by the pandemic, such as hospitality, leisure and retail.
We pride ourselves on being ‘different with good reason’, never providing generic advice or issuing standard template documents. You can be assured that our friendly and approachable experts will always tailor their advice to consider the needs of your business.
Please quote your Client Account Number on all correspondence and telephone calls. 24-hour client advice line: 0800 151 2935.