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What does the three-tier lockdown system mean for small businesses?

5-minute read

Sam Bromley

Sam Bromley

27 November 2020

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The government is reintroducing England’s three-tier system following the national lockdown ending on 2 December.

The tiers are now stricter, with huge implications for businesses in areas on higher alert than usual.

There are three alert levels – medium (tier one), high (tier two) and very high (tier three). These alert levels will decide what businesses are allowed to stay open, as well as what financial support is available to businesses.

For example, pubs, bars and restaurants must close in tier three areas, and can only operate as a takeaway or delivery service. They’re also only allowed to stay open in tier two if they serve a “substantial meal”.

Nik Antona, the chairman of the Campaign for Real Ale (CAMRA), said the fact that almost all of England will be in tier two or tier three means licensees have had their “worst fears” confirmed.

“This is especially devastating in the run up the Christmas, where people in Tier 3 areas won’t be able to go to the pub at all, and those in Tier 2 areas won’t be able to visit to socialise safely with those outside of their household – which will increase feelings of loneliness and social isolation after a year that has been tough for many.

“CAMRA has been clear – we do not think that evidence has been produced to justify extra restrictions on hospitality, and particularly wet-led pubs, but if the Government wants to proceed, they must announce more financial help.”

Why have local Covid-19 alert levels been introduced?

The government says that a regionally differentiated approach will help to “target the toughest measures only in the areas where the virus is most prevalent or where we are seeing sharper increases in the rate of infection.”

This means the alert level will change depending on the rate of infections in a particular area. The medium alert level is reserved for the baseline national restrictions, whereas high and very high bring tougher rules.

You should keep track of which alert level applies to your area, as the situation can change quickly and arbitrarily. You can find out which tier your area is in here.

These businesses can remain open across all tiers

This is the government’s list of businesses that can stay open regardless of tier:

  • essential and non-essential retail, including indoor and outdoor markets and car boot sales
  • leisure and sporting facilities like gyms, sports courts and facilities, leisure centres, fitness and dance studios, golf courses, swimming pools, riding centres, outdoor playgrounds – subject to relevant social contact rules in each tier. Indoor group activities and classes shouldn’t happen in tier three
  • personal care and close contact services like hairdressers and barbers, beauty salons, tattoo parlours, nail salons, spas and beauty services, massage parlours and tanning salons
  • public buildings, such as libraries, community centres and halls. They shouldn’t host events for private hire, for example birthday parties or most other social activities in tier three
  • allotments, recycling and waste centres, public toilets, car parks
  • essential public services such as the NHS and medical services, courts, and Jobcentre Plus sites
  • places of worship – communal worship can now resume, depending on relevant social contact rules in each tier

There are also exemptions from gathering limits across all tiers, which you can read at the bottom of this page.

Medium Covid alert level (tier one)

This is the normal level where national restrictions apply.

Unless your business is required to close by law (like nightclubs), you can stay open as long as you're following the Covid-secure guidelines.

At the moment, the national restrictions mean that people can’t socialise in groups of more than six. Here’s a summary of the tier one rules:

  • if your business sells food and drink, your customers have to consume it while seated, and you need to shut between 11pm and 5am. You should only offer table service
  • the closing time is different than before. Last orders are now at 10pm, which means customers will gradually leave the premises over the following hour, rather than leaving all at once
  • takeaways that sell products to eat and drink off the premises can open beyond 10pm, but they have to be sold through delivery service, click-and-collect or drive-through
  • the 11pm closing time also applies to other hospitality venues, including cinemas, museums, theatres and concert halls – but these can stay open to conclude performances that start before 11pm
  • if you run a fitness or sports business, you can carry on running classes outdoors, or indoors if you follow the rule of six (there are some exceptions to this restriction on mixing)
  • the public can attend indoor and outdoor events like performances, shows, sports and business events, with restrictions on capacity
  • weddings and funerals can go ahead, with restrictions on the number of attendees (15 for weddings and 30 for funerals)
  • if it’s possible for you and your employees to work from home, the government says that you should “where you can effectively do so”

Read more about the medium alert level restrictions.

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High Covid alert level (tier two)

On top of the above measures, areas in high alert have additional restrictions.

The main one is that you can’t socialise with anybody who isn’t in your household or support bubble in an indoor setting, at home or in public.

This has implications for businesses that serve customers. For example, people from different households shouldn’t mix in groups in restaurants, although there are of course limits to how this should be enforced in practice. One way is to remind customers about the rules when they book a table – but as London Eater points out, such a rule on mixing “is a serious, unprecedented burden that requires cooperation and respect from diners.”

In tier two, pubs and bars can only stay open if they also operate as a restaurant and can serve a “substantial meal” alongside alcohol.

Indoor exercise classes can only go ahead if it’s possible for people to avoid mixing with people they don’t live with, or don’t share a support bubble with (with some exceptions).

And while people are free to travel to open venues and amenities, the government asks that everybody aims to reduce the number of journeys they make.

Read more about the high alert level restrictions.

Very high Covid alert level (tier three)

Tier three restrictions essentially mean that an area, in all but name, is in lockdown.

From 2 December, tier three will be much stricter than the previous tier three, which permitted more businesses to stay open. Tier three means:

  • you can’t mix with anybody outside your household or support bubble, both indoors or in any private garden, and at most outdoor venues
  • hospitality businesses (including pubs, bars, cafes and restaurants) must close, but can “continue sales by takeaway, click-and-collect, drive-through or delivery services”
  • accommodation (including hotels, campsites and B&Bs) must close, unless they’re also used as your main residence
  • indoor entertainment and tourist venues must close (for instance cinemas, play centres and bingo halls)
  • indoor attractions at venues that are mostly outdoors have to close – for example, an indoor ride at a theme park
  • leisure and sports businesses can stay open, but group exercise classes (including fitness and dance) shouldn’t continue and saunas and steam rooms need to close
  • large outdoor events and large business events shouldn’t take place, and there shouldn’t be public attendance at sports events or indoor performances
  • organised outdoor sport and activity can continue, including exercise classes, but you should stop “higher-risk contact activity”
  • organised indoor sport and activity shouldn’t take place (with some exceptions)
  • you should avoid travelling to other parts of the UK (including overnight stays unless necessary) unless it’s for work, education, youth services, or to provide care

Read more about the very high alert level restrictions.

Is there financial support for businesses forced to close?

The government has extended the Coronavirus Job Retention Scheme (CJRS) – or furlough – until the end of March 2021.

There’s also help available through the Local Restrictions Support Grant (LRSG). This aims to support businesses in England that are forced to close, or face reduced demand because of restrictions.

Read more about the coronavirus support available for small businesses.

What do you think about the government’s tier system? Let us know in the comments below.

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Sam Bromley

Written by

Sam Bromley

Sam has more than 10 years of experience in writing for financial services. He specialises in illuminating complicated topics, from IR35 to ISAs, and identifying emerging trends that audiences want to know about. Sam spent five years at Simply Business, where he was Senior Copywriter.

We create this content for general information purposes and it should not be taken as advice. Always take professional advice. Read our full disclaimer

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