What security will be required for CBILS?

You cannot include the following payments in a claim:

• Discretionary bonus or commission payments
• Tips
• Non-cash payments
• Non-monetary benefits including taxable benefits in kind
• Salary sacrifice benefits that reduce an employee’s pay (however HMRC has agreed that such arrangements can be stopped by agreement if due to COVID-19 and the contract is changed)

The updated guidance has confirmed that all of the grant claimed should be paid to the employee in the form of money and that none of the grant is to the used to pay for the provision of benefits or a salary sacrifice scheme.

As the pandemic progresses, more and more people will be forced to self-isolate and, inevitably, both tenants and staff will be affected. Put plans in place to mitigate the impact that this may have, particularly regarding staff shortages. The most important focus here should be communication.

The Covid-19 outbreak will affect the pace of everyday life and delays will be expected. Rather than allowing the pandemic to take over completely, it is important to maintain open communication with tenants as much as possible and inform them of any front-facing challenges that you may face.

The Protocol does envisage that delays may occur and allows for some degree of flexibility. Whilst all efforts should be made to conduct inspections where practical and possible, it should be expected by all parties that timescales will be extended during this crisis. It is fundamental, however, that all changes made to standard practice are communicated and explained to tenants to manage expectations.

Similar flexibility should be afforded to tenants. As households are required to isolate it will not always be possible to gain access to properties as would usually be expected and required. Likewise, vulnerable people will wish to protect themselves and their families and may refuse access on this basis. During this period, a degree of understanding must be exercised and concessions made.

Inspections may be delayed if anyone in the household has  symptoms. A questionnaire should be prepared for those visiting properties to assess so far as possible the risk; Personal Protective Equipment should be issued to those visiting, and government guidelines followed.

Borrowers will not have to pay a guarantee fee. Lenders will pay a fee to access the scheme. The Government will make a Business Interruption Payment to cover the first 12 months of interest payments and any lender-levied fees, allowing smaller businesses to benefit from no upfront cost.

British Business Bank has indicated that following earlier discussions with the banking industry, some lenders indicated that they would not charge arrangement fees or early repayment charges to SMEs borrowing under the scheme. Each business should check the terms of the loans being made to ensure this is the case and what the interest rate and prepayment fees will be following the period in which the Government makes payment of these amounts.  

Another obvious cost cutting measure is to reduce working hours, either temporarily or permanently. Again, it should be done fairly, either across the board or by selecting teams/individuals based on objective business reasons. Imposing without agreement would create significant risk, therefore would require fair selection and consultation.

The Coronavirus pandemic will have impacted businesses in many different ways, but some of the most likely impacts that could have a legal implication are as follows:

• Services were not performed in accordance with contract during the period of disruption. This could be a reduction in volume of services performed, a suspension of services, or performance in a way that does not comply with contractual KPIs
• Late delivery or non-delivery of goods because of factory closures, or disruption in the supply chain
• Changes being agreed between parties to contracts to deal with the consequences of the Covid-19 outbreak