THE UK Webinar 2 June 2020 11:30 12:45 (BST) / 16:00 17:15 (IST) - - PowerPoint PPT Presentation

NAVIGATING CORONAVIRUS IN THE UK

Webinar 2 June 2020 11:30 – 12:45 (BST) / 16:00 – 17:15 (IST)

AGENDA

2

• UK India relationships and the support available to companies
• Latest updates on business reliefs including the furlough scheme
• Planning for your employees to return to work
• Ensuring health and safety in the work place
• Redundancies and changing the terms and conditions of employment
• Financing options from the UK government
• Q&A

YOUR SPEAKERS

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Tim Stovold, Tax and India Group Partner, Moore Kingston Smith Vijay Tanna, India Group Partner, Moore Kingston Smith Julie Chappell, Managing Director, London & Partners Chirag Rao Head of India Group, Howard Kennedy Anjali Raval, India Group & Employment Associate, Howard Kennedy Hosted by Bharat Rampal, Vice President BD, Moore Kingston Smith

Julie Chappell, Managing Director, London & Partners

Indian companies excelling in London

£41.2bn

total turnover

110,793

employees

842 Indian

companies in UK

54%

companies choose London as their HQ

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Indian companies set up in London this financial year

Support available from London and Partners

London Growth Hub

Online resource that brings together the capital’s vast business support

• ffer into a single hub.

Pay it Forward

A crowdfunding platform on London.gov.uk

London Alliance

A city-wide alliance to kick-start consumer confidence.

HELPING YOU THRIVE IN A CHANGING WORLD 7

PEOPLE

Tim Stovold, Tax and India Group Partner, Moore Kingston Smith

• To help employers whose operations have been severely

affected by coronavirus (COVID-19) to retain their employees and protect the UK economy

• The scheme is due to be in place from 1 March 2020 to 30 June

in its current form and changes from 1 July to 31 October when it will end

• 1m employers have applied for grants for 8,400,000+ employees

with £15bn+ claimed (as of 24 May 2020) CORONAVIRUS JOB RETENTION SCHEME The Scheme

HELPING YOU THRIVE IN A CHANGING WORLD 8

• Employers can claim a grant equal to the lower of:
• 80% of the monthly REFERENCE SALARY; or
• £2,500/month

Any amount received must be paid to the employee in full through the payroll along with any amounts you choose to top up

• PLUS – the associated employer’s NI (if being paid – watch out

for 52 week NI exemption for secondees from India)

• PLUS – the associated employer’s pension contribution (if being

paid – secondees will not normally have a pension contribution

• n the basis that they are not normally employed in the UK)

CORONAVIRUS JOB RETENTION SCHEME The Scheme until 30 June – a reminder…

HELPING YOU THRIVE IN A CHANGING WORLD 9

Month Furlough grant Payment due from employer Liability for employer’s NI and pension on grant Up to July 2020 Max of £2,500 or 80% of earnings None HMRC August Max of £2,500 or 80% of earnings None Employer September Max of £2,187.50 or 70% of earnings Max of £312.50 or 10% of earnings Employer October Max of £1,875 or 60% of earnings Max of £625 or 20% of earnings Employer November The Scheme will end on 31 October 2020 so no further furlough grants can be claimed

CORONAVIRUS JOB RETENTION SCHEME Changes to the scheme

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Cost covered by: HMRC Employer Up to 31 July 2020 Salary payment 2,500.00 0.00 Er's NI 243.94 0.00 Pension 59.40 0.00 2,803.34 0.00

100.0% 0.0%

August 2020 Salary payment 2,500.00 0.00 Er's NI 0.00 243.94 Pension 0.00 59.40 2,500.00 303.34

89.2% 10.8%

CORONAVIRUS JOB RETENTION SCHEME Phased increase to cost to the employer

HELPING YOU THRIVE IN A CHANGING WORLD 11

Cost covered by: HMRC Employer September 2020 Salary (70%/10%) 2,187.50 312.50 Er's NI 0.00 243.94 Pension 0.00 59.40 2,187.50 615.84

78.0% 22.0%

October 2020 Salary (60%/20%) 1,875.00 625.00 Er's NI 0.00 243.94 Pension 0.00 59.40 1,875.00 928.34

66.9% 33.1%

• From 1 July 2020:
• claim periods will no longer be able to overlap months. Claims

can either be for a part month or whole month but not straddle two consecutive months; and

• The number of employees an employer can claim for in any

claim period cannot exceed the maximum number they have claimed for under any previous claim under the current CJRS. CORONAVIRUS JOB RETENTION SCHEME Changes to process of making claims

HELPING YOU THRIVE IN A CHANGING WORLD 12

• The scheme will close to new entrants from 30 June.
• From this point onwards, employers will only be able to furlough

employees that they have furloughed for a full three-week period prior to 30 June

• Final date by which an employer can furlough an employee for

the first time will be the 10 June

• Employers will have until 31st July to make any claims in respect
• f the period to 30 June.

CORONAVIRUS JOB RETENSION SCHEME CJRS to be closed to new entrants from 1 July 2020

HELPING YOU THRIVE IN A CHANGING WORLD 13

• While on furlough, they:
• Provide no services to their employer whatsoever
• Generate no income for their employer directly or indirectly
• Can carry out voluntary work or training

If a client project has been cancelled and your secondees cannot return to India due to flights being unavailable, this is good grounds to furlough these employees Expect these conditions to be checked in future PAYE Compliance visits from HM Revenue & Customs

• Minimum period of furlough to entitle employer to grant is 3

consecutive weeks per employee – claims for less than this period will be rejected

CORONAVIRUS JOB RETENTION SCHEME The Scheme until 30 June – A reminder…

HELPING YOU THRIVE IN A CHANGING WORLD 14

• From 1 July, employers can bring back to work employees that

have previously been furloughed for any amount of time while still being able to claim CJRS grant for their normal hours not worked

• Employers can claim the grant for the hours their employees are

not working calculated by reference to their usual hours worked in a claim period.

• Minimum claim period reduces from 3 weeks to 1 week when

employee is flexi-furloughing CORONAVIRUS JOB RETENTION SCHEME Flexible furloughing from 1 July 2020 (1)

HELPING YOU THRIVE IN A CHANGING WORLD 15

• Any changes to terms of furlough must be agreed with the

employee in writing.

• Further guidance on flexible furloughing and how employers

should calculate claims will be published on 12 June.

• An example…

CORONAVIRUS JOB RETENTION SCHEME Flexible furloughing from 1 July 2020 (2)

HELPING YOU THRIVE IN A CHANGING WORLD 16

• Employee’s normal salary is £42,000 per annum (so

£3,500/month)

• Employee comes back to work for 3 days per week
• Employer decides to pay full salary for entire week rather than

reduce salary for 2 days not worked

• In August:
• Employer pays £3,500 + Er’s NI + Er’s Pension
• Employer claims 2/5ths x (Lower of 80% of Feb 2020 salary or

£2,500) = £1,000 CORONAVIRUS JOB RETENTION SCHEME Flexible furloughing from 1 July 2020 – an example

HELPING YOU THRIVE IN A CHANGING WORLD 17

• Draft legislation issued on 29 May 2020
• If HMRC later discover that grants paid were not due – for

example:

• Employees carried out services for their employer
• Errors were made in the claim
• Grants were paid to employer but not used to pay salaries
• Fraudulent claims

then HMRC will raise an assessment for Income Tax equal to the amount of grant to be clawed back CORONAVIRUS JOB RETENTION SCHEME Personal liability of directors for furlough claims and penalties (1)

HELPING YOU THRIVE IN A CHANGING WORLD 18

If the following conditions are satisfied:

• The company is in liquidation/administration or there is a serious

possibility of this happening;

• The director “knew” at the time that HMRC try to claw back the

grant that it should have been repaid; and

• There is a serious possibility that the company will not be able to

pay back HMRC; then, the director becomes joint and severally liable with the company for the grant being clawed back. CORONAVIRUS JOB RETENTION SCHEME Personal liability of directors for furlough claims and penalties (2)

HELPING YOU THRIVE IN A CHANGING WORLD 19

• If a director of the company knew that a grant should be repaid

but does not notify HMRC of this then this behaviour is deemed to be a “deliberate and concealed” act;

• Penalties for “deliberate and concealed” acts are a maximum of

100% of the amount due CORONAVIRUS JOB RETENTION SCHEME Penalties

HELPING YOU THRIVE IN A CHANGING WORLD 20

No.1 London Bridge London SE1 9BG www.howardkennedy.com

Are you ready for your staff to return to work?

2 June 2020

Your speaker today

Anjali Raval

India Group and Associate, Employment Get in touch +44 20 3755 5396 Anjali.Raval@howardkennedy.com

What I will be covering

• Ensuring health and safety in the

workplace

• Planning for your employees to return to

work

• Redundancies and changing terms and

conditions

Current state of play

• Furlough scheme extended to 31/10/20

– from 01/07/20 possible part-time work – but employers to share cost

• If you can work from home: do
• If you can’t: encouraged to return

H&S Obligations and Managing Risk

• Key obligation: do all reasonably can to set up a system
• f safe work and ensure that it is implemented
• WHO guidance: Getting your workplace ready for COVID-19
• The government's guidance:

– Guidance for employers – Social distancing guidance – Working Safely guidance

• ACAS guidance: advice for employers and employees
• HSE toolbox and guidance

Guidance: Key Themes

• Carry out a H&S assessment – share with staff and publish
• n website
• Consult with employees/employee reps about the

proposed H&S measures

• First option: Working from home
• Where not possible: make reasonable effort to comply with

social distancing guidelines and, where not possible, manage the transmission risk

• Keep the workplace clean!
• Employers not normally required to provide PPE

Key concerns for employers

Personal injury claims

Making redundancies End of furlough scheme Supporting remote workers Refusal to return

Reputational issues Staff with childcare problems Safe to travel to work? Health and safety

• bligations

Staff with medical conditions Employee relations

What about staff who are clinically vulnerable?

Extremely vulnerable: stay at home Vulnerable: Distancing Redeployment to safest role

Clinically vulnerable staff: legal issues

• Entitlement to pay if remain at home not working?

– Extremely vulnerable – furlough or SSP? – Remaining vulnerable group – suspension on SSP, annual/unpaid leave, furlough?

• Disability discrimination

– Failure to make reasonable adjustments – ‘Arising from’ disability

• Age discrimination
• Pregnant workers

– Risk assessment needed; alternative safe role; suspension on full pay if can’t work safely

• Vulnerable/shielding member of household

– Guidance says “take into account”

What about staff whose children are off school?

• Time off for dependants

– Unpaid – What is ‘reasonable’?

• Potential claims:

– Discrimination e.g. indirect sex discrimination – Unfair dismissal

• Practical solutions:

– Furlough – Unpaid leave: parental leave, time off for dependants

Staff who refuse to return on other safety grounds

Discuss reasons

Well- founded? If so - address

If not well founded..

Try to reassure

If can’t resolve

Discipline/ dismiss? Unpaid leave? Furlough? (possible?)

Do staff have a right to refuse to work?

• Employees:

– Danger + reasonable belief that it is serious and imminent + employee can’t reasonably avert danger = protection against detriment and dismissal – Ordinary unfair dismissal claims (2 years’ service)

• Employees and workers:

– whistleblowing protection – discrimination protection

Workplace Testing

• Health information – special category

data under the GDPR

• ICO FAQs – potentially lawful reason for

processing health data

• Temperature checks or thermal cameras

may not be proportionate

Redundancies and Changing Terms and Conditions

• Redundancies and restructuring

– Redundancy a potentially fair reason for dismissal but employers should properly consult with impacted employees to avoid unfair dismissal/discrimination claims

• Changing T&Cs

– Need to consult with staff and seek their agreement to changes before implementing

Collective Consultation

• Where there are 20 or more redundancies proposed in a 90 day period
• Consultation to start “in good time”
• Notify BEIS – form HR1
• Electing representatives
• Informing and consulting about ways of avoiding redundancies and

mitigating impact

– at least 30 days before the first dismissal: 20-99 dismissals – at least 45 days before if 100 or more dismissals

• Penalties:

– Failure to inform and consult – up to 90 days’ pay per affected employee – Failure to submit form HR1 – criminal liability for Company and Directors; unlimited fines

• This webinar gives general guidance and an overview for

workplaces in England but is not intended to be legal advice.

• The situation in relation to COVID-19 is developing rapidly: I

have sought to ensure that the contents are accurate as at 2 June 2020 but you are advised to check for the latest information.

• For any legal advice on specific circumstances please contact

me directly.

No.1 London Bridge London SE1 9BG T: +44 (0)20 3755 6000 F: +44 (0)20 3650 7000 DX 144370 Southwark 4 www.howardkennedy.com

Howard Kennedy LLP (registered in England and Wales OC361417) is authorised and regulated by the Solicitors Regulation Authority (number 557188). Our registered office is at No.1 London Bridge London SE1 9BG. #48964024.1

Thank You

HELPING YOU THRIVE IN A CHANGING WORLD 39

LOANS FROM BANKS FOR SMEs CBILS, CLBILS and Bounce Back Loans

Vijay Tanna, Partner, Moore Kingston Smith

• Bounce Back Loan Scheme (max loan £50k, no company size

restrictions)

• Coronavirus Business Interruption Loan Scheme “CBILS” (up to

£45m turnover, max loan size £5m)

• Coronavirus Large Business Interruption Loan Scheme “CLBILS”

(£45m up to £500m turnover, loans up to £50m)

• Covid Corporate Financing Facility – (£500m+ turnover)

LOANS FROM BANKS FOR SMES Scheme available depends on Company size

HELPING YOU THRIVE IN A CHANGING WORLD 40

• The Bounce Back Loan scheme is intended to provide support for the smallest businesses
• Administered through network of accredited banks
• Businesses can borrow between £2k and £50k, but the loan must not exceed 25% of turnover
• Simple online application form
• Up to 6 year term
• Interest rate of 2.5% p.a.
• First year’s interest and fees paid by government, and no capital repayments in first year, no early

repayment fee

• Loan is 100% guaranteed by UK government (compared with 80% under CBILS)

LOANS FROM BANKS FOR SMES BOUNCE BACK LOANS

HELPING YOU THRIVE IN A CHANGING WORLD 41

• Eligibility criteria:
• Impacted by Coronavirus
• Were not a business in difficulty as at 31 December 2019
• is engaged in trading or commercial activity in the UK and was established by 1

March 2020

• Not using the other CBILS, CLBILS etc. loan schemes
• Derives 50% of income from trading activity

LOANS FROM BANKS FOR SMES BOUNCE BACK LOANS

HELPING YOU THRIVE IN A CHANGING WORLD 42

Coronavirus Business Interuption Loan Scheme (“CBILS”)

HELPING YOU THRIVE IN A CHANGING WORLD 43

• CBILS is intended to provide financial support to SMEs that are seeing

their cashflow disrupted, as a result of the COVID-19 outbreak

• British Business Bank operates CBILS via its accredited lenders (incl.

Barclays, HSBC, Lloyds, Metro, NatWest, etc..) with the recommendation to use your incumbent bank first.

• The government gives the lender a guarantee for 80% of the value of

the loan to encourage more lending

• The borrower remains fully liable for the debt, but if in default, only 20%
• f the outstanding facility can be recovered under any personal

guarantees given.

LOANS FROM BANKS FOR SMES CORONAVIRUS BUSINESS INTERRUPTION LOAN SCHEME (CBILS)

HELPING YOU THRIVE IN A CHANGING WORLD 44

Your business must:

• Be UK-based in its business activity and borrowing to support this

activity

• Have a borrowing proposal which the lender:
• would consider viable, were it not for the COVID-19 pandemic
• Being able to show you could trade out of any short-term to medium-

term difficulty was previously a requirement, now banks can’t ask for this information but recommend it is provided if it supports the application.

• Generally formal due diligence assignments are not being carried out by

the banks

LOANS FROM BANKS FOR SMES CORONAVIRUS BUSINESS INTERRUPTION LOAN SCHEME (CBILS)

HELPING YOU THRIVE IN A CHANGING WORLD 45

• Loan amount of £50k to £5m for businesses with up to £45m

turnover

• Term debt and asset finance facilities allowed for up to 6 years
• Overdraft and invoice finance facilities allowed for up to 3 years
• Arrangement fees and interest for 12 months paid for by the

Government LOANS FROM BANKS FOR SMES CORONAVIRUS BUSINESS INTERRUPTION LOAN SCHEME (CBILS)

HELPING YOU THRIVE IN A CHANGING WORLD 46

• Security:
• No lender is allowed to take personal guarantees as security

for lending < £250,000

• Primary residential property cannot be taken as security

under the scheme

• Recovery under personal guarantees is limited to 20% of the
• utstanding facility in default

LOANS FROM BANKS FOR SMES CORONAVIRUS BUSINESS INTERRUPTION LOAN SCHEME (CBILS)

HELPING YOU THRIVE IN A CHANGING WORLD 47

Coronavirus Large Business Interruption Loan Scheme (“CLBILS”)

HELPING YOU THRIVE IN A CHANGING WORLD 48

• Operates through the biggest lenders, with the same eligibility criteria
• The maximum value of a facility provided under the CLBILS is £200 million subject to

25% of turnover test

• Borrowing >£50m restrictions on dividend payments, senior pay and share buy-backs

during the term of the loan

• 80% security guarantee from government as with CBILS
• First year interest and arrangement fees not covered by government, so different from

CBILS in that respect

• Due diligence may be carried out

LOANS FROM BANKS FOR SMES

CORONAVIRUS LARGE BUSINESS INTERRUPTION LOAN SCHEME (CLBILS)

HELPING YOU THRIVE IN A CHANGING WORLD 49

Expect to be asked the following as part of the credit application:

• Historic Viability (e.g accounts) - Bounce Back, CBILS, CLBILS
• Current Needs (e.g. 13 week cashflow) - CBILS, CLBILS
• Future Needs (e.g. 12 month + forecast) – CLBILS, CBILS (optional)

LOANS FROM BANKS FOR SMES

HELPING YOU THRIVE IN A CHANGING WORLD 50

INFORMATION REQUIRED

Scheme Value of Facilities Approved Number of Facilities Approved Total Number of Applications Bounce Back Loan Scheme (BBLS) £18.49bn 608,069 769,137 Coronavirus Business Interruption Loan Scheme (CBILS) £8.15bn 43,045 84,607 Coronavirus Large Business Interruption Loan Scheme (CLBILS) £0.82bn 154 502

COVID business lending data Applications and facilities approved for CBILS, CLBILS and BBLS AS AT 24 May 2020

HELPING YOU THRIVE IN A CHANGING WORLD 51

HELPING YOU THRIVE IN A CHANGING WORLD 52

Future fund for start-ups

• Announced on 20 April the UK’s £250m Future Fund is intended to provide support for high-growth tech

start-ups for whom the CBILS is not appropriate

• Financial support will be provided:
• In amounts between £125k and £5m
• Must be matched by third party equity on exactly the same terms
• In the form of convertible loan notes, which will convert into equity at a minimum of a 20% discount at

the end of their term (up to 3 years) or on the borrower’s next equity fundraising round. No EIS

• Will attract an 8% or higher rate of interest
• The business applying to the Future Fund must be a UK-registered unlisted company and must have raised

at least £250k from third party investors previously

• Future Fund financing can only be used for working capital purposes – it cannot be used to repay debt,

fund dividends or pay advisory fees

SUPPORT FOR START-UPS AND SCALE-UPS FUTURE FUND

HELPING YOU THRIVE IN A CHANGING WORLD 53

• Bank of England will buy short-term debt from large companies
• Scheme to operate for minimum of 12 months
• Eligibility:
• Make a material contribution to the UK economy
• Be investment grade rated (or equivalent) as at 1 March 2020
• Not be PRA- or FCA-regulated
• Not be a public undertaking

Support for larger companies with turnover > £500m Covid Corporate Financing Facility (CCFF)

HELPING YOU THRIVE IN A CHANGING WORLD 54

QUESTIONS

Please leave any questions you have for the panel in the Q&A

• r email one of our speakers after the session

Hemin Bharucha Chief Representative – India London & Partners hbharucha@londonandpartners.com Anjali Raval India Group and Employment Associate Howard Kennedy anjali.raval@howardkennedy.com Tim Stovold Tax and India Group Partner Moore Kingston Smith tstovold@mks.co.uk Vijay Tanna India Group Partner Moore Kingston Smith vtanna@mks.co.uk Chirag Rao Head of India Group Howard Kennedy chirag.rao@howardkennedy.com Bharat Rampal Vice President, Business Development Moore Kingston Smith brampal@mks.co.uk