This week the Northern Ireland Executive announced new measures in an attempt to tackle the spread of Covid-19; many of which are to take effect from this evening (Friday 16th October 2020) at 6pm.
These new restrictions will mean a number of local businesses will be forced to close, or have business activities at their premises directly curtailed. Below please find detailed information on the various schemes to assist those businesses who have been forced to close.
Localised Restrictions Support Scheme
What is the ‘Localised Restrictions Support Scheme’?
The ‘Localised Restrictions Support Scheme’ is only open to businesses which have been forced to close or had business activities at their premises directly curtailed by the Health Protection (Coronavirus, Restrictions) (No.2) Regulations (Northern Ireland) 2020.
The scheme provides financial support to businesses which have been required to close, or had business activities at their premises directly curtailed, by coronavirus restrictions that have been put in place by the NI Executive.
Subject to meeting the relevant eligibility criteria, the Scheme will be open to businesses including:
- Cafes, pubs & restaurants that have been temporarily forced to close or limit their business to takeaway, delivery or outdoor service only;
- Hotels & guesthouses temporarily forced to limit the provision of services to residents only;
- ‘Close contact’ services operating in commercial premises such as hairdressers & barbers, beauty salons, day spas, nail bars and tattoo parlours who have been forced to close; and
- Other businesses which are required to cease to carry on that business or to provide that service under Health Protection Regulations, including cinemas, museums, galleries, trampoline parks, inflatable parks, escape rooms, bowling alleys and ice rinks.
Applications to the scheme must be submitted online, and only by an ‘authorised representative’ for the business occupying the premises; such as the business owner, director or a senior manager.
If you operate from more than one eligible premises, you may apply for support in respect of each of these, and you should complete a separate online application for each premises’ that you consider may be eligible for support.
The scheme is designed to support the business occupying the property, not the landlord or managing agent, and therefore landlords must not apply on behalf of tenants who are renting their premises.
Scheme Eligibility Criteria
- The business must operate from a property within Northern Ireland; and
- The business must fall into at least one of the following categories:
- It has been registered with, or is in the process of registering with, their Council Environmental Health department as a business operating in one of the following categories: Cafe, Restaurant, Hotel, Guesthouse or Pub.
- It operates as a ‘close contact’ service in commercial premises such as hairdressers & barbers, beauty salons, day spas, nail bars and tattoo parlours.
- It operates as a cinema, museum, gallery, trampoline park, inflatable park, escape room, bowling alley, or ice rink.
- It is a business which has been forced to close or had business activities at their premises directly restricted by the Health Protection Regulations; and
- The business must have been open to the public and trading at the start of the restriction period set by the Health Protection Restrictions (unless the business is a wet pub serving drinks only).
Scheme Exclusions
- Public bodies are specifically excluded from the ‘Localised Restrictions Support Scheme’.
- Any business failing to comply with a ‘Covid-19 prohibition notice’ served to them by the PSNI will be specifically excluded from receiving support through the scheme.
What financial support will the scheme provide to eligible businesses?
Broadly speaking, the level of support that eligible businesses will receive is based on the total Net Annual Value (NAV) of the property from which the business operates, and the amount paid will then be dependent on which of the below categories the claimant business falls into.
Lower Rate – £1,600 for the initial two week period, then £800 thereafter for each subsequent week that the restrictions apply.
The lower rate will apply to:
- a business that is the sole occupant operating from a property with a NAV of £15,000 or less.
- a guesthouse with a ‘capital value’ (meaning it is valued as a domestic property for rates); or
- a business that is a joint occupant of a property with any NAV.
Standard Rate – £2,400 for the initial two week period, then £1,200 thereafter for each subsequent week that the restrictions apply.
The standard rate will apply to:
- a business that is the sole occupant of a property with an NAV between £15,001 and £51,000.
Higher Rate – £3,200 for the initial two week period, then £1,600 thereafter for each subsequent week that restrictions apply.
The higher rate will apply to:
- a business that is the sole occupant of a property with an NAV of £51,001 or more.
You can find the NAV of business properties in the ‘Non-Domestic Valuation List’ which is published online by Land & Property Services. Click here to search the Non-Domestic Valuation List.
Support payments will be issued to successful applicants for the period that the localised restrictions apply. If localised restrictions are subsequently extended, support payments under the scheme will also automatically continue. Support payments will stop when localised restrictions come to an end.
How To Apply
You must apply online to the Department of Finance for the Localised Restrictions Support Scheme.
The scheme is currently operational for eligible businesses in the Derry City & Strabane District Council area, and applications already submitted will automatically be considered for the increased levels of support announced by the NI Executive on 15th October 2020.
Online applications for businesses operating from premises in other Northern Ireland council areas are expected to open on Monday 19th October 2020.
Applications will be verified and processed as quickly as possible, but this could take up to three weeks. If you have not received confirmation that your application has been successful within this period, it may be because the Department of Finance need to contact you for further information.
If your application is successful, support payments will be sent directly to your nominated bank account and you will receive an email to confirm payment has been issued. However, payments can take up to seven working days to appear in your bank account.
Urgent queries about your application can be sent to LocalisedRestrictions@finance-ni.gov.uk, and you should ensure that you quote your application reference number in your email.
Note that funding will have to be repaid if it is later discovered that any information provided on the online application form is fraudulent or false.
Further Information
Further information about the Localised Restrictions Support Scheme, including frequently asked questions, can be found here.
New Job Support ‘Expansion Scheme’
for Closed Business Premises
What is the ‘Expansion Scheme’ ?
- One of the main eligibility requirements of the Job Support Scheme which was announced recently is that employees must work at least 33% of their usual hours. However, this scheme was heavily criticised as it did not make any provision for employees who are unable to work at all because their employer has had to close as a result of coronavirus restrictions.
- The Chancellor therefore announced on the 9th October 2020 that the Job Support Scheme would be ‘expanded’ to support businesses across the UK who were legally required to close their premises due to changes in local or national coronavirus restrictions imposed by the government.
- The Expansion Scheme will follow the same structure as the Job Support Scheme, operating from 1st November 2020 (when the current furlough scheme ends) for six months until 30th April 2021.
- The grants will be taxable and employers will be able to claim on a monthly basis in arrears, with the first payments under the scheme due to be made by HMRC in December 2020.
- The scheme will be reviewed by the government in January 2021.
What financial support will the Expansion Scheme provide to eligible businesses?
- Under the Expansion Scheme, the government will pay two thirds of employees’ salaries (or 67%), up to a maximum of £2,100 a month.
- Employers will not be required to contribute towards employees’ gross wages as such, but will have to fund the cost of any employer NIC’s and auto-enrolment pension contributions.
- This contribution represents a very small proportion of overall employment costs however, and as a result the government estimate that around 50% of potential claims will not incur any employer NI or auto-enrolment pension contributions; thus many businesses will face no employer contributions.
Which businesses will be eligible for the Expansion Scheme?
- The business must be legally required to close its premises as a result of restrictions set by one of the four governments in the UK, including premises which are restricted to delivery or collection services (eg restaurants normally offering table service but are now only able to operate as a takeaway as a result of the restrictions).
- It is not enough for a business to choose to shut due to the ongoing impact or risk of coronavirus; the scheme will only apply if the business is instructed to close (as above).
- The Expansion Scheme will not apply where a business is required to close by a local public health authority as a result of a specific workplace outbreak.
Which employees will be eligible for the Expansion Scheme?
- The Expansion Scheme can only be used for employees who cannot work for their employer as a result of coronavirus restrictions imposed by the government.
- In order to be eligible, an employee must be employed and included on an RTI submission for that employer on or before 23rd September 2020.
- Eligible employees must be off work for a minimum of seven days consecutively, and must have ceased to work completely for that employer.
- An employee cannot be made redundant or put on notice of redundancy during the period for which the employer is claiming the Expansion Scheme grant for that employee.
How does the Expansion Scheme interact with previous schemes?
- The employer does not need to have claimed previously under the Furlough Scheme in order to be eligible for the Expansion Scheme. Therefore it is possible that employers could be eligible to claim a grant under the JSS or Expansion scheme for employees who did not qualify for the Coronavirus Job Retention Scheme.
- Once an employer’s business is permitted to reopen they will no longer be able to claim for employees’ wage costs under the Expansion Scheme. However, the employer may then be eligible to make a claim under the Job Support Scheme instead, provided they meet the relevant criteria for that scheme.
- Employers will still be able to claim the Job Retention Bonus (if eligible), and grants claimed under the Expansion Scheme can be used to help meet the ‘minimum income threshold’ and other payment criteria for that scheme.
As always please do not hesitate to contact us if you require any assistance of further guidance.
Stay Safe
Exchange Accountants.
