This article outlines the financial support available to businesses in Guernsey that have been adversely affected by measures introduced to manage the spread of COVID-19.
Phase 1: payroll co-funding scheme
Under the original payroll co-funding scheme, the states of Guernsey offered to assist employers with paying employees an amount equivalent to the minimum wage (£8.50 per hour or £8.05 per hour for 16 to 17-year-olds). For a 35-hour week, this equates to a gross figure of £298. Under the original scheme, the states of Guernsey offered to meet 80% of that amount, with employers required to make up the remaining 20% (equivalent to £60 per week). Employers are also encouraged to top this amount up if they can do so.
Criteria
Under the original scheme, the financial assistance is available to all employers (regardless of the number of employees) in the sectors affected by a loss of business income due to COVID-19 – namely:
- hospitality and tourism;
- passenger transport and travel;
- rental and leasing of cars and recreational goods;
- recreation and entertainment;
- event management and event services;
- personal service activities, such as hairdressers, beauticians and animal boarders;
- commercial fishing;
- private extracurricular education, such as dance and riding schools;
- non-food and non-pharmacy retail (including garages, garden centres and marine retailers);
- advertising and marketing;
- construction;
- manufacturing and engineering (including marine traders);
- cleaning services;
- window cleaning;
- gardening;
- pet care services;
- waste services (particularly those focused on commercial and building work);
- estate agents;
- architects and building designs services;
- facilities management and office management;
- security and cash transfer activities;
- freight and goods transfer (excluding food);
- dental and dental hygienists and other non-essential personal health and hygiene roles; and
- personnel recruitment services.
However, the following should be noted:
- Employers must have been trading for at least six months (ie, from 1 September 2019).
- Support will be calculated based on the normal hours worked by affected employees.
- Employees must be permanent employees.
- The support was made available for an initial period of up to 13 weeks (ie, until 13 June 2020). However, the scheme has since been extended to 30 June 2020.
- Employers must continue to collect employee obligations for both the Employee Tax Instalment (ETI) Scheme and states insurance; however, employer states insurance contributions will be deferred while the co-funding scheme operates.
On 15 May 2020 the scheme was extended to self-employed individuals (whether operating through a company or as a sole trader).
If a self-employed person is on the payroll of their company, a copy of the payroll should be submitted with their claim.
If a self-employed person draws their income from the business, or a sole trader has no payroll, they should submit a claim up to a maximum of their usual income. Applicants should note that there is a cap of 42 hours' payment up to a maximum of £1,237.60 per month.
How to apply
Application forms can be obtained by contacting '[email protected]'. Any queries can be sent to the same address.
Phase 2 of the payroll co-funding scheme expands on the original scheme and offers additional support. As of 4 May 2020, the amount of support is linked to the extent of the loss of income experienced by a business as a result of the COVID-19 crisis.
Criteria
There are two levels: the standard level and the enhanced level.
Standard level
Businesses whose turnover exceeds 40% and up to at least 70% of normal levels can continue to apply for up to 80% of the minimum wage for their employees. Again, this upper threshold will be extended to 80% of normal turnover for those businesses most in need. Businesses will continue to contribute the remaining 20% of their employees' wages.
Enhanced level
Businesses whose turnover has fallen to less than 40% of normal levels can apply for up to 100% of the minimum wage for their employees through the payroll support scheme. This upper threshold will be extended to 50% for those businesses which are most in need and can demonstrate that support is still necessary.
Ultimately, the difference between the standard and enhanced levels is the percentage contribution that the employer makes to the payroll payment.
Businesses whose turnover improves to above 70% (or 80% in some cases) can continue to receive this support for a further two weeks after their turnover reaches that level. These businesses must still contribute the remaining 20% of their employees' wages.
In order to be considered for the standard or enhanced level, employers must meet the same eligibility criteria as under the original scheme. In particular:
- employers must operate in an eligible sector (as above);
- employers must have been trading for at least six months (ie, from 1 September 2019);
- the support will be calculated based on the normal hours worked by the affected employees;
- employers can claim only for permanent employers;
- the support is available until 30 June 2020; and
- employers must continue to collect employee obligations for both the ETI scheme and states insurance; however, employer states insurance contributions will be deferred while the co-funding scheme operates.
Self-employed individuals remain subject to a cap of 42 hours per month. This means that they will be reimbursed up to a maximum of £1,237.60 per month under the standard level and £1,547 under the enhanced level.
How to apply
To streamline and improve the payment process, a website payment portal has operated and managed and approved applications from 11 May 2020. Businesses can apply for the enhanced payroll funding as of this date here. Claims that are entitled to the enhanced level of funding will be backdated to the week beginning 4 May 2020.(1)
Grants for small businesses and the self-employed
Businesses and the self-employed can apply for a one-off business grant of £3,000 (non-taxable). This grant is intended to provide financial support until the end of June 2020 or until restrictions are ended, whichever is sooner.
Criteria
Applicants must:
- operate in an eligible sector (as above) or be a small business bookkeeper;
- have been trading continuously since 1 September 2019;
- be small, with 10 employees (including themselves if self-employed) or fewer as at 16 March 2020; and
- be the primary source of income and run as a full-time business.
The states of Guernsey will consider requests from businesses in other sectors of the economy where they can demonstrate hardship as a result of the restrictions in place on businesses operating due to COVID-19.
Further, if a self-employed person claims income support, the value of the grant under this scheme may be considered when calculating the value of the income support payable. For income support purposes only, the grant will be valued at £230 per week for a maximum of 13 weeks.
How to apply
To apply, businesses should send an email, including their name and contact phone number, to '[email protected]'.(2)
The states of Guernsey have set up a £5 million Hardship Fund to provide emergency financial help to people who may not otherwise qualify for the unemployment benefit, the sickness benefit or income support. The Hardship Fund is anticipated to assist workers, and the small businesses which employ them, in the tourism, hospitality and construction sectors by providing short-term financial support so that workers do not leave the future labour market.
The Hardship Fund may be available where an individual:
- has been made redundant;
- remains in employment or self-employment but with severely reduced household income – for example, as a result of reduced working hours or rate of pay;
- is unable to work because they are sick or have been required to stay home in self-isolation in line with public health guidance; or
- is unable to work because they are caring for a dependant child who cannot attend their school, college, nursery or childminder's house, or where the child's normal informal childcare arrangement (eg, looked after by grandparents) is no longer appropriate.
How to apply
The helpline for applications can be reached at +01481 732 516. Alternatively, individuals can send an email, including their name and contact telephone number, to '[email protected]' and someone will call them as soon as possible.(3)
Deferring social security payments
To assist with cash flow in the short term, businesses can apply to defer social security employer contribution payments for Q2 (due mid-July) on request.
Criteria
This option is available to businesses which are suffering financial difficulties as a result of the COVID-19 pandemic.
Businesses will still need to pay ETI liability and social security employee contributions because they are paid on behalf of employees, not the business. Businesses are also still required to submit the quarterly employer schedule and ETI returns by 15 July 2020.
How to apply
Requests to defer social security payments will be treated on a case-by-case basis. Requests should be emailed to '[email protected]' using the subject line "Social Security Employer Contribution Deferral" and should include reasons for the request. Self-employed individuals can also apply to defer their social security contributions in the same manner.(4)
Deferring tax on real property payments
To assist with cash flow in the short term, businesses can apply to defer tax on real property (TRP) payments until July 2020.
Criteria
This option is available to businesses which are suffering financial difficulty as a result of the COVID-19 pandemic.
How to apply
Requests to defer TRP will be treated on a case-by-case basis. Requests should be emailed to '[email protected]' using the subject line "TRP Deferral" and should include reasons for the request. Someone will respond to emailed requests as soon as possible.(5)
Government rent deferrals and renegotiations
Rent for Q1 and Q2 may be deferred until after 30 June 2020 where the government, or a government-owned company, is a landlord for a local business. This covers business rents only and not residential property rents.
Criteria
This option is available for business tenants which are suffering financial difficulties as a result of the COVID-19 pandemic.
How to apply
Requests for rent deferral will be treated on a case-by-case basis. Requests should be emailed to '[email protected]' using the subject line "Rent Deferral" and should include reasons for the request. Someone will respond to emailed requests as soon as possible.(6)
Endnotes
(1) Any queries should be emailed to '[email protected]'. Government guidance is available here.
(2) Any queries should be emailed to '[email protected]'. Government guidance is available here.
(3) Any queries should be emailed to '[email protected]'. Government guidance is available here.
(4) Any queries should be emailed to '[email protected]'. Government guidance is available here.
(5) Any queries should be emailed to '[email protected]'. Government guidance is available here.
(6) Any queries should be emailed to '[email protected]'. Government guidance is available here.
