What will be the added cost to business of furloughing staff from 1 July 2021?

The CMA sees only limited circumstances in which a full refund would not be given. The CMA accepts that where public health measures prevent a business from providing a service or the consumer from receiving it, the business may be able to deduct a contribution to the costs it has already incurred in relation to the specific contract in question.

This view reflects a relatively complex area of law under which parties are released from obligations under a contract if performance of that contract becomes impossible or illegal. This is called “frustration” of the contract. Under a law passed during World War II, a party to a contract that is frustrated who has incurred expenses is permitted, if the court thinks fit, to retain an amount up to the value of those expenses out of any money they have been paid by the other party.

The CMA’s view, however, is that this will not happen often, and that deductions from deposits will be limited.

• Audit
  • Identify your off-payroll contractors
  • Determine the status of off-payroll contractors
    • CEST – HMRC employment status checker for tax purposes
• Communication – liaise with affected workforce
• Contracts – get them compliant
• Consider the Ward Hadaway toolkit

The CMA is particularly concerned about certain activities, its guidance highlights:

• Exchange of commercially sensitive information where this is not necessary in response to the crisis
• Collaboration which unfairly excludes third parties
• Abuse of a dominant position (including a dominant position held as a result of the crisis) – particularly to charge excessive prices
• Seeking to maintain prices or prevent reductions in prices
• Cooperation going beyond what is necessary to respond to the crisis in the interests of consumers

A new Permitted Development Right has been introduced by The Town and Country Planning (Permitted Development and Miscellaneous Amendments) (England) (Coronovirus) Regulations 2020 providing for the construction of new dwellinghouses on detached blocks of flats.

The new Right comes into force on 1 August 2020 and from this date development consisting of works for the construction of up to two additional storeys of new dwellinghouses immediately above the existing topmost residential storey which is a purpose-built, detached block of flats is permitted development.  The Right additionally covers specified associated works, the construction of fire escapes and ancillary structures, bin stores for example.

The Right is subject to detailed criteria being met and to a prior approval process to the Local Planning Authority who can consider the acceptability of the proposed development in a range of respects.  A link to the Regulations is here.

The Regulations additionally include a number of further amendments including additional rights for the holding of markets and for additional temporary uses of land for a time limited period.  They additionally include amendments to existing permitted development rights for the change of use of buildings to dwellinghouses through a requirement that there be adequate natural light in all habitable rooms.

Employees are generally permitted to take holidays during furlough. However, Government guidance has been updated to state that “Employees should not be placed on furlough for a period simply because they are on holiday for that period.” If a period of furlough happens to coincide with an employee’s holiday then you should ensure that there are business grounds to support furlough being used in that instance so that it isn’t just being used as a means to fund holiday utilisation.