Prime minister Boris Johnson has confirmed that all UK restaurants, pubs, bars, cafes and other leisure businesses will be forced to close their doors tonight as part of new stricter measures put in place to control the spread of coronavirus.
He then went on to say that food and drink businesses can continue to operate a takeaway service, but should close to dine-in visits ‘as soon as they reasonably can’.
These measures will be reviewed every month.
In the same press briefing, held on 20 March, chancellor Rishi Sunak also announced the launch of a new package designed to support employers and employees feeling the knock-on economic effects of the Covid-19 outbreak.
The Coronavirus Job Retention Scheme applies to all UK businesses in every sector, and aims to protect peoples’ jobs.
Employers can now contact HMRC for a grant to cover up to 80% of wages for all employees on a PAYE scheme, up to a value of £2,500 a month; employers can then further top up the salary if needed.
This allows workers in any part of the UK to retain their job even if their employer has to temporarily close their business amid the coronavirus outbreak.
The new scheme covers backdated wages from 1 March 2020, and is initially open for at least three months, but the chancellor confirmed it can be extended for longer if necessary.
Guidelines for employers will be published in due course.
The chancellor also announced that the Coronavirus Business Interruption Loans will now be interest-free for 12 months, instead of six as originally stated, and will be available starting Monday 23 March.
Further cash flow support announced by the government through the tax system includes the deferral of the next quarter of VAT payments; no business will need to pay from now until end of June, and will have until the end of the current financial year to repay bills.
Though the news has been welcomed by the industry, and an 80% support in salary is great for the hospitality sector, unless rent payments are either deferred or cancelled in line with this support, the worries won’t be over for businesses struggling to make ends meet in these uncertain and unprecedented times.
“This a big package but there is a growing problem as money doesn’t flow through til the end of April,” tweeted Kate Nicholls, chief executive of UKHospitality.
“The lack of urgency and immediacy will cause real problems – no business has yet got their hands on a loan and companies in hospitality – now told to close – will run out of cash.
“It is vital now that all rent payments for hospitality businesses – due on Wednesday next week – are cancelled or deferred. Mass business failure likely without it as businesses have no cash.”