Coronavirus FAQs for Companies Working in the IT and/or Data Infrastructure Sector
To compile these questions and answers, the FIA sought expert advice from Andrew Buckley, a partner at Woodfines Solicitors, and Peter Woolsey a certified public accountant at Minney and Co. the FIA’s auditors.
Q: As a Company working in the Information technology and/or data infrastructure sector, are my employees classified as “Essential workers” by the Government during the Coronavirus crisis and are they eligible for coronavirus testing?
A: Yes and yes. Read more at Gov.uk here.
Q: Can my employees put their children into schools?
A: Yes. Read more at Gov.uk here.
Q: I need one of my technicians to undertake some training but they’re furloughed. Can they do this whilst I claim 80% of their pay on the Job Retention scheme?
A: Yes, a furloughed employee can undergo training provided that this does not involve the manufacture or creation of an item or part thereof than can yield revenue for the company, the provisions of services to the company, or the provision of any service that can yield revenue for the company. Firms can require workers to undertake training from home, provided it meets the above.
The Government will still contribute 80% of the wages of the furloughed employee whilst they are training.
Q: I need to get my storeman back in off furlough for a few days to sort out some paperwork. Can I do that and then furlough them again?
A: Yes. The Government’s Coronavirus Job Retention Scheme reads – “Any employees you place on furlough must be furloughed for a minimum of 3 consecutive weeks. When they return to work, they must be taken off furlough. Employees can be furloughed multiple times, but each separate instance must be for a minimum of 3 consecutive weeks. Each period of furlough can be extended by any amount of time whilst the employee is on furlough.”
Q: An employee is living with a vulnerable family member but I have work for them. Can I make them return to work?
The Government guidance identifies people who are ‘clinically extremely vulnerable’ and recommends that they stay at home. However, the guidance specifically states that other members of their household do not need to ‘shield’ but should do what they can to support them in shielding and observing social distancing.
The Government has not required all businesses to shut during the Covid 19 pandemic but recommends that where businesses continue to operate, employees should be supported in social distancing.
An employer can normally require its employees to attend work. The problem is that if an employee refuses to return to work because they believe that their workplace is unsafe, or because they need to take action to avoid danger to others, an employer may be minded to start disciplinary action against them. If an employee is dismissed in these ‘health and safety’ type scenarios, they may be able to bring a claim for ‘automatically unfair dismissal’. Normally, in order to bring an unfair dismissal claim, an employee needs 2 years of continuous service, but this rule does not apply in automatically unfair dismissal cases. An employer may well have a defence to such a claim, but defending such a claim would be both costly and time consuming.
Q: I fear that one of my employees may claim he’s being unfairly treated by being furloughed. How can I protect against this?
A: The gold standard here would be to use a matrix approach to justify why one worker over another has been chosen for furlough. However, many businesses had to make decisions about furlough quickly in order to ensure their survival and did not have time to use a matrix approach. So long as there is a solid business reason justifying why one employee has been furloughed (or not furloughed) over another, this is likely to be sufficient. Employers should avoid subjecting any employee to a ‘detriment’ based upon the 9 protected characteristics set out in the Equality Act : age, race, sex, sexual orientation, pregnancy/maternity, disability, religion/belief, gender reassignment and marriage/civil partnership. Nor should employers subject employees to any detriment based upon the fact that they have ‘blown the whistle’ about illegal practices in the workplace.
Read more on the Coronavirus Job Retention Scheme at Gov.uk here.
Q: A Premier League football club want us to install some data cabling during lockdown. Are we allowed to do this?
A: Yes, so long as social distancing guidelines can be observed. If social distancing guidelines cannot be observed, then you should take all possible mitigating actions to reduce the risk of transmission. The government have recommended :
- Telling staff to wash their hands frequently with soap and water for 20 seconds, after arriving at work, before and after eating, after using public transport and particularly after coughing, sneezing or blowing their nose.
- Minimising contact between workers and avoiding skin to skin and face to face contact.
- Keeping groups of workers in teams that are as small as possible.
- Ensuring that windows are left open for ventilation.
- Regular cleansing of work equipment.
Q: I need to close my business premises because of COVID-19. Do I still have to pay the rent to my landlord?
A: It is likely that you will still have to pay rent but you are currently protected from eviction if you miss a payment up to the end of June. Read more on at Gov.uk here.
Check you lease terms. If you are prevented from accessing your premises, you may be eligible for a rent holiday or reduction.
You should check your business insurance provisions and see what cover is available and if your insurance can cover your rental payments.
Q: The Landlord insures my business premises under its building insurance. Would it not cover the present COVID-19 situation to alleviate my rent payment obligations?
A: Probably not, but you should check the insurance policy documents closely.
Many leases contain some rent-suspension provision in the event when insured risk occurs and the premises become inaccessible or unfit for occupation. Such insured risks often include fire, explosion, lightning, earthquake, storm, flood, bursting and overflowing of water tanks, apparatus or pipes, impact by aircraft and articles dropped from them, impact by vehicles, subsidence, ground slip, heave, riot, and civil commotion. The Landlord might opt to include other perils in its business insurance package. I have not seen it myself amongst an insurance risk for a building, but there may be other named risks that will be applicable, such as ‘pandemic’ or ‘epidemic’.
Q: I have heard of the term “force majeure”. Can this apply to me during this crisis save me from paying the rents?
A: In a commercial lease, we often see the provisions for a “force majeure” event (when one party is prevented or delayed from performing its contractual obligations due to unforeseeable events), providing some form of release in the circumstances. What would constitute a force majeure event depends on the wording in the lease, and a party claiming a force majeure event has to demonstrate that the lease obligation is incapable of being performed due to an unforeseen event. It would be difficult for a tenant to claim that non-payment of the rent is a force majeure event.
Be honest with your landlord and discuss and agree an achievable solution (such as temporarily reducing the rent). It is important that the terms of such agreements be documented in writing in a clear and succinct manner.
Q: I run an IT Communications company. Could I qualify for a 12-month business rates holiday?
A: It’s unlikely.
The Expanded Retail Discount scheme is a business rates holiday that only applies to retail, hospitality and leisure businesses in England for the 2020/21 tax year as part of measures to support businesses during the outbreak of COVID-19.
You can read more at Gov.uk here.
Q: I run an IT Communications company. Could I qualify for the Small Business Grant Fund?
A: Maybe. The Small Business Grant Fund (SBGF) provides grant funding for businesses eligible for Small Business Rates Relief (SBRR) and Rural Rates Relief (RRR).
Read more here.
Q: If I make a loss this year because of the tough trading conditions, can I, for tax reasons, offset this against following years or previous year’s profits?
A: If you make a trading loss that you cannot use it to offset against tax in the same year, you may be able to choose to carry it back to earlier accounting periods, or it will be carried forward to be set off against the profit for future periods.