COVID-19 Update: Questions raised by NITA on the UK Tourism Industry Emergency Response Group (30th March)

NITA are part of the UK Tourism Industry Emergency Response Group, representing the Tourism Industry in Northern Ireland.

We are having regular calls and are able to raise issues/concerns/questions on behalf of the whole Tourism Industry in NI. As we receive answers and further guidance we will update this page.

Our next call is 31st March. We have raised the following to date:

The Job Retention Scheme has certainly provided a life-line to a number of Tourism businesses and has saved thousands of employees being laid off. This has been very much welcomed from those tourism businesses that are able to avail of the scheme

Below we have outlined the feedback and questions we have had from members and those businesses who are not being supported through the initiatives already announced.

Support for Tourism Businesses who do not pay Business Rates

Speaking to members over the weekend, there are still a lot of tourism businesses who are not able to access any of the support that have been announced to date. These include the self-employed, those who rent premises or work from home and don’t pay business rates and are therefore not eligible for either the £10K or £25K grant and those who are zero-rated – coach operators, who in some cases have large refunds due from HMRC.

Update 30th March - There is no grant support for businesses that is not linked to business rates and we continue to push for this with government.

Self-Employed

With regard to support for the self-employed, we support the call for significantly more support. This would could be based on 80% of previous earnings up to a maximum of £2,500 per month We would note that this should be based on at least a year’s earnings, as this virus has struck following the quietest 4-5 months of the tourism calendar. The spring/summer season is when the self-employed tour guides and experience providers work flat out to ensure they have enough to see them through the winter months.

The other challenge for some self-employed is they do not necessarily pay themselves a salary but utilise drawings or dividend.

Update 30th March - The UK Chancellor announced the Self-Employed Support Scheme with those eligible receiving a cash grant worth 80% of their average monthly trading profit over the last three years. HMRC to make payments directly in a single lump sum instalment covering all 3 months - payment date: June. 2018-19 tax return MUST have been filed and you have 4 weeks to file and be included in the scheme. More details at HERE. The government has also provided FAQs

Job Retention Scheme

With regard to the Job Retention Scheme, a number of questions have been raised:

Update 30th March - New guidance was provided on 26th March for EMPLOYEES and EMPLOYERS. On 26th March NITA in partnership with Mills Selig held a webinar on Job Retention Scheme and Financial Support. Q&As from the webinar can be accessed HERE

• As you know in the last two weeks we have seen significant lay-off across all Tourism sectors and companies are asking if they are able to take staff back on, and then apply to the Job Retention scheme to support the salaries.

Update 30th March - An employer can re-employ staff and place them on furlough instead. They will be able to claim a grant to cover 80% of monthly earnings, up to a monthly cap of £2,500.

• Reading the guidance on Gov.uk it says - ‘If your employer intends to access the Coronavirus Job Retention Scheme, they will discuss with you becoming classified as a furloughed worker. This would mean that you are kept on your employer’s payroll, rather than being laid off. To qualify for this scheme, you should not undertake work for them while you are furloughed’ - This assumes that those companies who are keeping workers on, still have an income. What about companies that need to keep staff employed, for example security of attractions, but have no income?
• Also, what about those employers who are trying to keep going but are unable to generate income? This could be companies who are trying to be proactive, by planning for the recovery, skilling up etc. More clarification is required.

Update 30th March - A furloughed employee can take part in volunteer work or training, as long as it does not provide services to or generate revenue for, or on behalf of your organisation. We are still awaiting guidance regarding those organisations who are not trading or generating income but have activities that staff can work from home on in order to plan for the recovery.

• How are Zero hours contract workers handled under the Job Retention Scheme

Update 30th March - If the employee has been employed for less than a year, you can claim for an average of their monthly earnings since the started work. If the employee only started in February 2020, use a pro-rata for their earnings so far to claim. Once you’ve worked out how much of an employee’s salary you can claim for, you must then work out the amount of Employer National Insurance Contributions and minimum automatic enrolment employer pension contributions you are entitled to claim. For full time and part time salaried employees, the employee’s actual salary before tax, as of 28 February should be used to calculate the 80%. Fees, commission and bonuses should not be included.

• When will there be procedures in place for furloughed staff? Most people will run payroll this week and would like to know the situation.

Update 30th March - The Coronavirus Job Retention Scheme is a temporary scheme open to all UK employers for at least three months starting from 1 March 2020. The online service you’ll use to claim is not available yet. We expect it to be available by the end of April 2020. You can only submit one claim at least every 3 weeks, which is the minimum length an employee can be furloughed for. Claims can be backdated until the 1 March if applicable.

To claim, you will need:

• your ePAYE reference number
• the number of employees being furloughed
• the claim period (start and end date)
• amount claimed (per the minimum length of furloughing of 3 weeks)
• your bank account number and sort code
• your contact name and phone number

You will need to calculate the amount you are claiming. HMRC will retain the right to retrospectively audit all aspects of your claim.

• If companies pay the balance of 20% to full salary can they be requested to work e.g. 1 day a week for business continuity?

Update 30th March - We have asked for further guidance

• Online guidance for the reimbursement of the Job Retention Scheme grants mentions that reimbursement should be within weeks but if companies need short term cash flow support, they may be eligible for a business interruption loan. Loans are not an option for most operators and indeed most small businesses especially when it looks like they will miss this year’s complete tour season and that next year’s tour season will be badly affected as people will not be able to afford to travel and will also probably be disinclined to travel for a while.
• Have the government asked banks to support businesses in terms of a special facility until reimbursement by HMRC?

Update 30th March - Rishi Sunak, UK Chancellor, Andrew Bailey, Governor of the Bank of England, and Andrew Woolard, the CEO of the FCA, wrote to the CEOs of the UK Banks on the subject of COVID-19 and bank lending on 25th March. They ask the banks to take all action necessary to ensure that the benefits of the measures announced by the Chancellor are passed through to business and consumers. Link to LETTER

VAT Refunds

One of the issues we have raised before, particularly for the Coach operators, is the question of VAT refunds. It has been a welcome intervention that VAT payments have been deferred, but for coach operators, they are zero-rated and have therefore paid out VAT that is not due to be refunded until May. In some circumstances this can be tens of thousands of pounds where investment has been made in new coaches. Given that a number of these businesses are renting premises and therefore not eligible for any of the grants, having this money refunded would make a huge difference.

Update 30th March - This has been raised and acknowledged by government but we are still awaiting further information.

Banks

• A major part of the interventions has been the additional liquidity and guarantees given to the banks. I have had some anecdotal feedback with regard to the behaviour of some banks. This has included - Significant increases in costs to extend facilities and up to 4 weeks to get an appointment to discuss individual cases.
• A member informed by their bank that if your borrowing from them is approved and that is an IF, it will not be at 1% but the price you pay at the moment if you have an existing overdraft – that was not their understanding from PM/Chancellor statement.
• Also banks looking for inordinately long list of info from clients which some feel is far too detailed even though some procedures need to be in place, it does appear excessive to them.

Update 30th March - Rishi Sunak, UK Chancellor, Andrew Bailey, Governor of the Bank of England, and Andrew Woolard, the CEO of the FCA, wrote to the CEOs of the UK Banks on the subject of COVID-19 and bank lending on 25th March. They ask the banks to take all action necessary to ensure that the benefits of the measures announced by the Chancellor are passed through to business and consumers. Link to LETTER

Insurance

• Insurance companies are insisting hotels are manned and in some cases refusing any claims for stock write offs - the stock is one thing but the manning of premises is a huge issue. Are Government talking to insurance industry?
• Will insurance companies allow a holiday period without insurer treating them as new business rather than renewal when they do come back into operation?

Update 30th March - You are advised to contact your insurance company at the earliest opportunity to discuss your particular case.

Caravan Parks

Ambiguity re closure of caravan parks and who can stay. Our understanding is that if owners are using them as interim abodes ie their main home is not available then this is OK. There was some discussion earlier that people should be staying in their main abodes and not in a secondary home. However can you confirm there is clarity on people being allowed to stay on caravan sites – most sites aren’t providing any facilities apart from electric hook ups if required.

Update 30th March - Unless caravans are being used as a primary residence they should be closed.

Self Catering Businesses

Can they still operate?

Update 24th March - Businesses should follow the guidance and take steps to close for commercial use as quickly as possible. However, full consideration should be given to the possible exclusions in terms of which residents should be allowed to remain. And any decision to close should be implemented in full compliance with the social distancing guidelines.

The closure applies to any business providing holiday accommodation, including short term lets bar very specific exclusions.

Hotels and other accommodation providers should be able to remain open if

a. They are part of the key worker / vulnerable groups / health response.

b. There is a specific need for some or all of the site to remain open (e.g. they are housing people who have been flooded out of their homes and/or being used to provide services under local authority homelessness duties/powers or by other public services to provide emergency accommodation).

c. Some people live full time in holiday parks and caravan parks - if that is their primary residence they can remain

What happens to families in temporary accommodation/B&Bs?

If the temporary accommodation is currently the families primary residence, they can remain.

Off Licence Stores

Are they able to stay open?

Update 30th March - Guidance was updated and Off Licenses are able to stay open with the social distancing requirements.