COVID-19 – Government support for Jersey businesses

This guidance is current up to 27 March 2020

The Coronavirus (COVID-19) pandemic has rapidly changed the business landscape, with increasing restrictive measures on day-to-day life to contain the spread of the virus already having a significant impact on businesses in Jersey and elsewhere, for example where businesses have been told to close their businesses temporarily.

Understandably, these are difficult times for businesses. We have already produced a number of briefings but in this briefing, we set out various support measures which have been announced by the Government of Jersey (Government) to help protect local businesses during this period.

This is a rapidly changing area and we advise that for the most up-to-date information, you check the Government's specific page on support measures for business here.

Coronavirus Payroll Co-Funding Scheme

Phase 1

This scheme is available from 20 March 2020 to 31 March 2020.

The Government will retrospectively pay employers and self-employed workers (subject to certain limitations set out below) a subsidy of each worker's wage, up to £200, provided that worker does not earn more than £10,000 per month. The payment will be made in April 2020.  

This applies for businesses in the following sectors:

  • Hotels
  • Restaurants
  • Bars
  • Wholesale
  • Retail (excluding food)
  • Fisheries
  • Hairdressing and other beauty treatment.

This amount can be claimed where the worker has been paid either (i) at least £320 per week or (ii) £1,390 per calendar month.

Where a worker's pay is lower than this, the business can claim 60 per cent of either (i) 35 per cent of the worker's usual monthly wage or (ii) 35 per cent of each worker's usual weekly wage (multiplied by four).

The Government has published FAQ which can be found here.

In particular:

  • Self-employed persons include sole traders and partnerships, provided that they pay Class 2 social security contributions and in the case of Class 2 individuals, to not have business income of more than £10,000 per month (Qualifying Self-Employed Persons).
  • Businesses must continue to provide employment for workers subsidised under the scheme and where any staff accommodation is provided immediately before the scheme, this must continue to be offered for the duration of the scheme, whether or not the worker actually remains employed by that business.
  • If a business has spare capacity with workers on the scheme, those workers must be made available as required by the Government to support actions needed by the Government or the community as a result of the pandemic.

Phase 2

This scheme will apply from 1 April 2020 to 30 June 2020 (although this may be extended if needed). Payments will be made following submission of wage information to Customer and Local Services and so the first payment will be made available following submission of April 2020 wage information.

This will provide a maximum subsidy of 80 per cent of the lower of each 'qualifying' worker's (i) normal rate or (ii) £2,000 a month. As a result, the maximum payment will be £1,600 per qualifying worker per month.

'Qualifying' workers are defined as those earning £10,000 a month or less who were (i) working for the business in February 2020 and (ii) were included in the social security contribution schedule for February 2020, and have been retained in employment. It includes all types of worker, including those on zero-hours contracts and fixed term contracts.

The scheme is only available to the following businesses and self-employed:

  • Businesses who do not operate in any of the following industries:

Local agricultural activities and wholesalers

Financial, legal, accounting, management and professional services

Information and communication activities

Property development

Advertising  and market research

Employment agencies and HR services

Medical and dental care activities (that are not otherwise shut down)

Freight, water and air transport

Wholesale of agricultural goods

Utility companies

Supermarkets, pharmacies, grocery stores and fuel retailers

Consultancy services

Veterinary activities

Primary and secondary education (not including nurseries)

Social care and residential care activities

Office administration and support

Security services

Government owned entities, or any organisation in receipt of a grant or subsidies of over £50,000 from the Government of Jersey (unless agreed on an exceptional basis)

  • Qualifying Self-Employed Persons

In each case, they must have experienced, or be highly likely to experience, significant detriment due to restrictions put in place to manage the spread of the virus.

The same conditions apply as for Phase 1 set out above.

It is worth noting that, unlike the equivalent UK scheme, there is no requirement for the worker to be unable to work (described in the UK as being 'furloughed'). Under the terms of the Jersey scheme, the worker should work as far they are able to within the health guidance and restrictions issued by the Government during the pandemic and, as set out above, businesses need to provide workers with capacity to support government and community actions.

Again, unlike the UK scheme, an employer is permitted to negotiate wages with an employee during the life of the scheme. However, wages above £2,000 a month cannot be adjusted so that they fall under that threshold.

The Government has published FAQ which can be found here

Jersey Business Disruption Loan Guarantee Scheme

From 30 March 2020, £50 million of loans and overdrafts (of between £5,000 and £500,000) will be made available by local banks to 'qualifying' businesses, to manage short-term cash flow to viable businesses where their existing lender is unable to support them under that lender's normal lending criteria. £40 million of this additional lending capacity will be guaranteed by the Government.

In order to be a 'qualifying' business, turnover must be less than £10 million and they must not operate in any of the following industries:

  • Finance and professional services
  • Real Estate
  • Property development
  • Public sector
  • Utilities

Businesses are asked to sign up to Jersey Business' newsletter to receive further information  on how to apply once available. 

The Government has published FAQ which can be found here

Jersey COVID-19 Special Situations Fund

The Government has made available up to £50 million for 'qualifying businesses' which deliver a 'public good or serve an essential purpose for Jersey'. This relief may be in the form of grants, loans or equity stakes.

At present, there is little information on the exact criteria and the Government has indicated that the criteria will be published in April 2020 but applications will be considered by a panel of senior Government officials and independent specialists based on those criteria, which will include:

  • A demonstration that the business provides an important public good, or is strategically important to Jersey.
  • A demonstration that the measures introduced to manage the spread of the virus have been detrimental to the business
  • A viable and time bound recovery plan for the business and exit strategy for the Government.

The Government has published FAQ which can be found here. In particular, the Government is clear that this Fund is designed for longer term support and where immediate funding is required then a business should look to the Jersey Business Disruption Loan Scheme.

Any business which considers that it may wish to apply for support from the fund is at this stage invited to contact the Government informally through emailing economy@gov.je.  

GST and Social Security Deferral Scheme

All GST-registered businesses may choose to defer payment of GST relating to quarterly and monthly returns ending 31 March, 30 April, 31 May and 30 June. Payment of the deferred amounts will be due no later than 12 months after the date they would normally have been due.

Businesses with fewer than 80  employees and self-employed individuals may choose to defer Social Security contribution payments for A and B quarters (i.e. those due in April and July 2020). This is available immediately and no notification is required. 

Any business with more than eighty employees may request a deferral of social security contributions.

A factsheet produced by the Government of Jersey on both of these measures can be found here.

Rental Payment Deferrals

Where the Government of Jersey is a landlord to a Jersey business (either directly or through a Government-owned business), it will consider rental payment deferrals, where that business is suffering hardship as a result of the pandemic. Affected businesses will need to make that request directly to the landlord or other property contact.

Deferrals will not be granted as a matter of right, but will be considered on a case by case basis.

Help with taxes

Other than the GST deferral scheme mentioned above, Revenue Jersey has indicated (see here) that where a taxpayer is experiencing temporary issues as a result of the pandemic, it will look to be sympathetic.

However, Revenue Jersey has indicated that it will still expect taxpayers to file all tax returns on time and to use online returns where available. All matters relating to tax should be communicated electronically where possible.

How Collas Crill can help you

Collas Crill prides itself on being easy to do business with. We take a hands-on approach and are here to help you and your business in these uncertain times.

Please feel free to reach out to any of the contacts listed in this briefing or any of your usual Collas Crill contacts. 

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