Client Alert 27 Mar. 2020

UK Insight: COVID-19 (Coronavirus) Regulations and Business Support Measures

This alert is available for download HERE

COVID-19 has resulted in major disruption to businesses and individuals throughout the United Kingdom. As a result the UK Government has implemented a range of new rules, regulations and support measures to address the unfolding situation. The main provisions are contained in the UK Coronavirus Act of 2020 and the Health Protection (Coronavirus, Restrictions) (England) Regulations 2020; the information below highlights certain selected key areas. Additional measures may be applicable to you and your business that are not addressed here. Considering that the situation surrounding COVID-19 is very fluid and changing rapidly, we would encourage you to get in touch with one of our London team members if you have any questions.

Government Rules and Guidance for Businesses and Individuals

As of March 26, the UK Government has adopted the new Health Protection (Coronavirus, Restrictions) (England) Regulations 2020 (the “Regulations”) which expand upon and revoke the Health Protection (Coronavirus, Business Closure) (England) Regulations 2020, adopted March 21. Combined, the Regulations and guidance issued by the UK Government, order the closing of all “non-essential shops and public spaces”. Subject to certain exceptions, these include the following:

  • all retail stores selling non-essential goods (i.e. clothing and electronics stores; hair, beauty and nail salons; and outdoor and indoor markets, excluding food markets);
  • libraries, community centres, and youth centres;
  • indoor and outdoor leisure facilities such as bowling alleys, arcades and soft play facilities;
  • communal places within parks, such as playgrounds, sports courts and outdoor gyms;
  • places of worship, except for funerals attended by immediate families; and
  • hotels, hostels, bed and breakfasts, campsites, caravan parks, and boarding houses for commercial/leisure use, excluding permanent residents, key workers and those providing emergency accommodation, for example for the homeless.

Broadly speaking the exceptions relate to essential functions and activities that are being carried out by businesses and venues (including but not limited to hosting essential voluntary or public services, transacting essential retail and delivery services). If you are unsure whether your business is affected by the Regulations or is potentially excepted from closure, please get in touch with one of our London team members.

In addition, the UK Government’s newly published rules on staying at home and away from others should be considered when determining whether to continue the operations of a UK business. The new rules state that UK residents should only leave the house for one of the following four reasons:

  • shopping for basic necessities, for example food and medicine, which must be as infrequent as possible;
  • one form of exercise a day, for example a run, walk, or cycle - alone or with members of your household;
  • any medical need, or to provide care or to help a vulnerable person; or
  • travelling to and from work, but only where this absolutely cannot be done from home.

The rules stress that these four reasons are exceptions. When carrying out any of these activities, UK residents should minimise time spent outside of the home and ensure that they are at least two meters apart from anyone outside of their household.

Given the rapidly evolving landscape surrounding COVID-19 closures, we would recommend keeping these rules and guidance under continuous review.

Covid Corporate Financing Facility

The Bank of England has launched the Covid Corporate Financing Facility (“CCFF”) a new lending facility that is accessible for UK businesses that are “fundamentally strong but are experiencing severe disruption to cashflows”. The CCFF will provide interim financing for businesses that make a “material contribution to the UK economy” by purchasing commercial paper (short-term corporate debt) of up to one-year maturity, to be issued by such businesses. Businesses that wish to participate in the CCFF will have to prove that they were in sound financial health prior to the onset of disruption caused by COVID-19 and do not need to have previously issued commercial paper.

If you are interested to receive more information about the CCFF generally, CCFF eligibility and how to apply for the CCFF, please contact one of our London team members.

Coronavirus Business Support Measures

In addition to the CCFF, the UK Government has implemented a package of temporary measures to help combat the economic shock caused by COVID-19. These include:

  • a Coronavirus Job Retention Scheme (HMRC to reimburse 80% of the wages of ‘furloughed workers’, up to £2,500 per month);
  • deferring VAT and Income Tax payments;
  • a Statutory Sick Pay relief package for small and medium sized businesses (SMEs);
  • a 12-month business rates holiday for all retail, hospitality, leisure and nursery businesses in England;
  • small business grant funding of £10,000 for all business in receipt of small business rate relief or rural rate relief;
  • grant funding of £25,000 for retail, hospitality and leisure businesses with property with a rateable value between £15,000 and £51,000;
  • the Coronavirus Business Interruption Loan Scheme offering loans of up to £5 million for SMEs through the British Business Bank;
  • the HMRC Time To Pay Scheme; and
  • protection from eviction for commercial and residential tenants.

More information on each of the Coronavirus Business Support Measures can be found here. We will continue to monitor the UK Government’s response to COVID-19, and will be publishing timely updates on significant developments.

Attorney advertising. The material contained in this Client Alert is only a general review of the subjects covered and does not constitute legal advice. No legal or business decision should be based on its contents.

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