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Jonathan Hughes
Partner | Legal
Jersey
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Jonathan Hughes
Partner
Jersey
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A guide to financial support for businesses in Jersey that have been adversely affected by measures introduced to manage the spread of COVID-19
Please note that the situation and government guidance in relation to Covid-19 in Jersey is evolving at a fast pace and the information contained in this publication should not be used as a substitute for legal advice.
Contents:
Phase 1 - Payroll co funding scheme
Phase 2 - Payroll co funding scheme
Phase 3 - Payroll co funding scheme
Business Disruption Loan Guarantee Scheme
COVID-19 Special Situations Fund
Deferring payment of Social Security contributions
Government rent deferrals or renegotiations
Summary
A short-term wage subsidy measure in the early stages of Covid-19. Eligible businesses can apply for £200 per week towards wages paid in the period 20 to 31 March 2020.
Criteria
To be eligible for Phase 1 the business must:
Businesses can apply for £200 per week for an employee who was on the payroll in February 2020, who worked from 20 to 31 March 2020 and has been paid either:
For employees earning lower amounts, 60% of wages will be paid for the proportion of the month that was affected by the restrictions.
Employees earning more than £10,000 a month (gross) do not qualify.
How to apply
Applications for Phase 1 closed on 30 April 2020.
Payments will be made from the beginning of April.
More information
Email any queries to payrollcofunding@gov.je
Guidance for the Coronavirus Co-Funded Payroll Scheme: Phase 1
Summary
Follows Phase 1 support but offers greater financial support over a longer period (1 April to 31 August 2020) to a wider range of businesses. The Government will subsidise wages up to a maximum of £1,600 per month to help businesses reduce their costs and protect job prospects in the longer term.
Criteria
A wage subsidy can be claimed for employees in the following circumstances:
A wage subsidy is not available for staff employed through a third-party (eg employment agency) or employees who earn £4,558 or more per month.
The business must meet all of the following requirements –
How to apply
Phase 2 support will be available each month for April to August 2020. The business must pay wages to staff before claiming and must present wage records with its application. Applications should be submitted online each month here - Phase 2 application form.
Where the business is applying for a 'special exemption' from paying 20% of wages, it must provide pro-forma cash-flow forecasts for the relevant month, as well as additional declarations and financial information as part of its application, including that the change to hours or pay has been agreed with the employee and that the business has considered all options for managing its working capital.
More information
Co-funding payroll scheme phase 2 - Guidance
Summary
The Government announced on 31 July 2020 that Phase 3 of the scheme will continue to be available during the period from September 2020 until March 2021 but support will be tapered, gradually reducing the government subsidy from 80% of wages to 20% of wages by March 2021 (see the table below).
Sep | Oct | Nov | Dec | Jan | Feb | Mar | |
Detriment | 20% | 20% | 20% | 20% | 20% | 20% | 20% |
Subsidy | 60% | 60% | 40% | 40% | 30% | 30% | 20% |
Maximum Payment | £1,200 | £1,200 | £800 | £800 | £600 | £600 | £400 |
Criteria
In order to be eligible to claim under the scheme, businesses must return to broadly normal trading patterns (subject to health advice) and must not remain closed if it is safe to open or artificially restrict revenue to make them eligible for the scheme.
The business must have experienced or be very likely to experience "material detriment" due to restrictions put in place to manage the spread of COVID-19 – evidence will be required. "Material detriment" will be determined by a loss of turnover over the relevant period of at least 20% compared with a previous comparable trading period. The test of material detriment has been reduced from 30% under the Phase 2 scheme to 20% from September 2020.
How to apply
Phase 2 support will be available each month for September 2020 to March 2021. More details are expected to be provided by the Government.
More information
https://www.gov.je/news/2020/pages/cofundedpayrollphase3.aspx
Summary
Loans or overdrafts to help qualifying businesses to manage short-term cash flow constraints. Government underwrites 80% of borrowing. The borrower will remain 100% liable for the debt. Allows banks to extend financing to smaller businesses that are viable but unable to obtain finance under the lender’s normal requirements. Businesses can apply to borrow between £5,000 to £500,000.
Criteria
All local businesses can apply for the scheme, regardless of their business activity or sector.
How to apply
The scheme is available from 1 April 2020.
Businesses should contact their bank in the first instance.
Jersey Business will provide a web portal providing links to the participating banks to apply for the scheme.
More information
Complete the online form first to assess eligibility for the scheme and to ensure that the business is prepared to make an application directly to one of the participating lending banks.
https://one.gov.je/service/Business_disruption_loan_guarantee_scheme
FAQs for the Business Disruption Loan Guarantee Scheme
Any questions should be referred to Jersey Business.
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Summary
£50 million scheme open for applications from qualifying businesses which deliver a public good or serve an essential strategic purpose for Jersey. Support may be provided under the scheme in the form of grants, loans or equity positions.
Criteria
Applications will be considered by a panel of senior Government officials and independent specialists based on criteria including:
How to apply
To discuss a potential application to the scheme, email details to the Economy Team.
More information
FAQs for the Jersey Covid-19 Special Situations Fund
Summary
To help businesses and self-employed individuals with their cash flow, businesses may be able to defer social security contribution payments. Postponed contributions will be held on the businesses' account and payment will be discussed in due course.
Criteria
Whether deferring payments or not, businesses must continue submitting quarterly schedules.
How to apply
More information
Email the Contributions Team
Government of Jersey guidance on deferring payment of Social Security contributions
Summary
With immediate effect, GST-registered businesses can choose to defer the payment of GST relating to quarterly and monthly returns ending 31 March, 30 April, 31 May and 30 June. This deferral is to help businesses manage their cash flow at this time. This is not a cancellation of monies owed.
Criteria
How to apply
According to the guidance, businesses do not need to notify Government that they are deferring the payment. Postponed GST will be held on the businesses' account and arrangements for payment will be made in due course.
More information
Email the GST team
Summary
Rent deferrals or renegotiations, where the Government, or a Government-owned company, is a landlord to a local business.
Criteria
Available for business tenants who are suffering financial difficulty as a result of the COVID-19 pandemic.
How to apply
Each request for rent deferral will be treated on a case by case basis. Requests for rental deferment should be made directly to the landlord or property contact.
More information
On the Jersey Business website
Summary
Measures in relation to the payment of income tax to help businesses experiencing cash flow and trading difficulties.
Criteria
Any business that foresees problems paying their debt.
How to apply
Contact the Treasury and Exchequer Debt Management Team to discuss their time to pay arrangements. Cases of hardship will be treated sympathetically.
debtcollection@gov.je or call +44 (0) 1534 440088
More information
On the Taxes Office website
Ogier is a professional services firm with the knowledge and expertise to handle the most demanding and complex transactions and provide expert, efficient and cost-effective services to all our clients. We regularly win awards for the quality of our client service, our work and our people.
This client briefing has been prepared for clients and professional associates of Ogier. The information and expressions of opinion which it contains are not intended to be a comprehensive study or to provide legal advice and should not be treated as a substitute for specific advice concerning individual situations.
Regulatory information can be found under Legal Notice
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