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How will the delay to lockdown easing affect small businesses?

3-minute read

Catriona Smith

15 June 2021

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The government has confirmed an extension to England’s lockdown, dashing the hopes of a return to normal as planned on 21 June.

The four-week delay to the roadmap and full reopening of the economy was announced by Boris Johnson yesterday because of the rise in coronavirus cases. Read on to understand what this means for small businesses and the self-employed.

Reduced capacity for hospitality businesses continues

England is to remain at Stage 3 of the roadmap, which is another blow to the hospitality industry as they struggle with capacity limits, and in the case of nightclubs, continued closures.

This is challenging for pubs, bars and restaurants who have to significantly reduce the number of customers they serve in order to comply with social distancing measures.

The sector has been hit particularly hard during the pandemic and a recent Simply Business survey of pub and restaurant owners revealed that Covid-19 is set to cost them more than £40,000 each. But with limits on social contact remaining in place, this is likely to be even higher.

According to reports from UKHospitality, operating under these restrictions for an additional four weeks will cost the sector around £3 billion in sales.

This is just one of the many challenges for the sector with 20 per cent of bookings resulting in no-shows and staff shortages nationwide.

No extension to furlough support

It doesn’t look like there’s going to be any change to the furlough scheme, which is due to come to an end on 30 September.

As the scheme tapers off, employers will be expected to contribute to wages despite restrictions limiting how businesses can operate.

From 1 July employers have to contribute 10 per cent of furloughed workers’ salaries, and from 1 August they must pay 20 per cent.

Businesses are calling for this timeline to be reviewed, but so far there’s no indication that Chancellor Rishi Sunak will extend this support.

Business rates holiday ending

The business rates holiday is set to end on 30 June.

Since 1 April 2020, eligible businesses in retail, leisure and hospitality haven’t had to pay their business rates bill – a vital lifeline for businesses throughout the various lockdowns.

That said, business rates will be discounted by two thirds until 31 March 2022 (up to a value of £2 million per business) so some level of financial support will continue.

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Work from home where possible

There’s no change in the rules for office workers. The government continues to recommend that people work from home where they can, so many businesses with employees will need to rethink plans for welcoming staff back to work.

But those who can’t do their jobs remotely, like construction workers, plumbers and fitness instructors for example, are still allowed to go into work.

A glimmer of hope for weddings

There's an element of respite as some restrictions will change on 21 June to allow certain events to go ahead.

Under current rules, there is a 30-person limit for attendees at weddings and civil partnership ceremonies and celebrations. From 21 June though, the number of people who can attend will depend on how many people can be in the venue with social distancing measures in place.

Wedding planners, venues and cake makers have faced much uncertainty over the past 18 months, but hopefully this easing of restrictions will allow more people to go ahead with their celebrations.

There will also be changes to the rules on:

  • commemorative events
  • large events pilots (including some UEFA EURO 2020 matches and other sports, arts and music performances)
  • care home visits
  • domestic residential visits for children

You can read more about what you can and can’t do on the government website.

The government said it will review the data again in two weeks but it’s unlikely the restrictions will change before 19 July. As with previous stages of the roadmap, the date for easing restrictions will be confirmed with a week’s notice.

How do you feel about the delay to easing lockdown? Let us know in the comments.

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