The UK Government and governments in the devolved nations have put in place a number of measures to support the cinema sector during the current Coronavirus/COVID-19 outbreak.
The picture remains a developing one, so UK Cinema Association members are encouraged to check this page regularly for updates.
Where there are differing approaches by nation, these are noted below. Otherwise it should be assumed that the measures listed apply to all UK cinemas (although other eligibility criteria might apply).
Throughout the UK there will be a 12 months business rates holiday for all businesses in the retail, hospitality and leisure sector.
CORONAVIRUS JOB RETENTION SCHEME
The Coronavirus Job Retention Scheme has enabled all UK employers to access support to continue paying part of their employees’ salary for those employees that would otherwise have been laid off during this crisis.
All UK businesses are eligible.
Employers will need to:
- designate affected employees as ‘furloughed workers,’ and notify your employees of this change – changing the status of employees remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation;
- submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal (HMRC will set out further details on the information required).
Particular points of note are that:
- Employers will be able to claim for 80 per cent of furloughed employees’ usual monthly wage costs, up to £2,500 a month, plus the associated Employer National Insurance contributions and minimum automatic enrolment employer pension contributions on that wage. 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 per cent. Fees, commission and bonuses should not be included.
- If an employee has more than one employer they can be furloughed for each job. Each job is separate, and the cap applies to each employer individually.
- 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.
There are particular provisions relevant to the position of employees on low- or variable-hours contracts. Where such an individual has been employed for a full twelve months prior to the claim, an employer can claim for the higher of either:
- the same month’s earning from the previous year
- average monthly earnings from the 2019-20 tax year
If the employee has been employed for less than a year, the employer can claim for an average of their monthly earnings since they started work.
A step-by-step guide on claiming from the Scheme can be found here.
Details on how to work out how much an employer can claim can be found here.
On 28 May, the Chancellor confirmed changes to the Scheme.
In particular it was confirmed that the contribution made by Government towards furloughed employees’ wages will be gradually tapered, until such time as the Scheme closes at the end of October, as follows:
- June and July: The government will pay 80% of wages up to a cap of £2,500 as well as employer National Insurance (ER NICS) and pension contributions.
- August: The government will pay 80% of wages up to a cap of £2,500. Employers will pay ER NICs and pension contributions.
- September: The government will pay 70% of wages up to a cap of £2,187.50. Employers will pay ER NICs and pension contributions and 10% of wages to make up 80% total up to a cap of £2,500.
- October: The government will pay 60% of wages up to a cap of £1,875. Employers will pay ER NICs and pension contributions and 20% of wages to make up 80% total up to a cap of £2,500.
Other new provisions around the Scheme to be introduced from 1 July included that:
- claims from this date onwards will be restricted to employers currently using the scheme and previously furloughed employees. The scheme will close to new entrants on 30 June, with the last three-week furloughs before that point commencing on 10 June;
- from this date onwards employers will be able to agree any working arrangements with previously furloughed employees, enabling the return of previously full-time employees on initially part-time terms if appropriate, with Government supplementing their previous ‘full-time’ salaries;
- when claiming the CJRS grant for furloughed hours; employers will need to report and claim for a minimum period of a week, for grants to be calculated accurately across working patterns.
More details on these changes can be found here.
CORONAVIRUS BUSINESS INTERRUPTION LOAN SCHEME
Across the UK, the temporary Coronavirus Business Interruption Loan Scheme will support SMEs with access to loans, overdrafts, invoice finance and asset finance of up to £5 million and for up to 6 years. The scheme is open to businesses with a turnover of no more than £45 million.
The government will also make a Business Interruption Payment to cover the first 12 months of interest payments and any lender-levied fees, so eligible businesses will benefit from no upfront costs and lower initial repayments.
The government will provide lenders with a guarantee of 80 per cent on each loan (subject to pre-lender cap on claims) to give lenders further confidence in continuing to provide finance to SMEs.
The scheme will be delivered through commercial lenders, backed by the government-owned British Business Bank.
There are 40 accredited lenders able to offer the scheme, including all the major banks.
CORONAVIRUS ‘BOUNCE BACK’ LOAN SCHEME
The Coronavirus Bounce Back Loan scheme provides loans of up to £50,000 (or up to 25 per cent of turnover) for small and medium-sized businesses. The Government will guarantee 100 per cent of the loan and there will not be any fees or interest to pay for the first 12 months. Loan terms will be up to 6 years. No repayments will be due during the first 12 months. The Government will work with lenders to agree a low rate of interest for the remaining period of the loan.
The scheme will be delivered through a network of accredited lenders.
Those in receipt of a Coronavirus Business Interruption Loan cannot claim from the Coronavirus Bounce Back Loan scheme, but may be able to transfer a loan from the former into the new scheme.
SELF-EMPLOYMENT INCOME SUPPORT SCHEME
The Self-Employment Income Support Scheme is intended to support self-employed workers.
The Scheme will support self-employed individuals (including members of partnerships) whose income has been negatively impacted by COVID-19 by providing a grant worth 80 per cent of their profits up to a cap of £2,500 per month.
In calculating the level of grant, HMRC will use the average profits from tax returns in 2016-17, 2017-18 and 2018-19. The scheme will be open to those where the majority of their income comes from self-employment and who have profits of less than £50,000. The scheme will be open for an initial three months with people able to make their first claim by the beginning of June.
Eligibility is limited to those who:
- Are self-employed or a member of partnership;
- Have lost trading/partnership trading profits due to COVID-19;
- Filed a tax return for 2018-19 as self-employed or a member of a trading partnership. Those who have not yet filed for 2018-19 will have an additional 4 weeks from this announcement to do so;
- Have traded in 2019-20; be currently trading at the point of application (or would be except for COVID 19) and intend to continue to trade in the tax year 2020 to 2021;
- Have trading profits of less than £50,000 and more than half of your total income come from self-employment. This can be with reference to at least one of the following conditions:
- Trading profits and total income in 2018/19
- Average trading profits and total income across up to the three years between 2016-17, 2017-18, and 2018-19.
In the UK, all small and medium-sized businesses and employers will be able to reclaim Statutory Sick Pay (SSP) paid to workers for sickness absence due to COVID-19.
The scheme is available to all of those with fewer than 250 employees as of 28 February 2020 and cover up to 2 weeks’ SSP per eligible employee who has been off work because of COVID-19.
In England, Northern Ireland and Wales, there will be a moratorium on lease forfeiture and debt recovery enforcement, now extended until the end of September. This will prevent landlords of commercial properties from exercising any rights of forfeiture that may have been due to the non-payment of rents by tenants.
The provision simply delays the right of forfeiture; it does not otherwise impinge on a landlord’s right to claim forfeiture or recover rent at the end of that period.
Details of the position on these matters in Scotland are still to be confirmed.
For further information on any of these elements, please contact the UK Cinema Association on email@example.com.
[Page last updated 29 May 2020]