Covid 19 General Advice, Links & Docs

In these uncertain times we wanted to reach out to all our contacts to let you know we are here to offer support over the next few months and help ensure pharmacies continue to run with as little disruption as possible.

Hutchings Accountants can help you assess and limit the impact of COVID-19 on your business by working with you to calculate break-even point, prepare cash flow forecasts, identify the main financial and operational risks (including the ongoing business administration) and develop strategies to address them.

If you or someone you know would like some help and advice, please contact us on 01494 722224 and we can arrange a free video call to discuss any concerns. This is very easy to set up through your mobile and can be done using WhatsApp, Facetime or a number of other applications.

The following documents may be useful:

Cash Flow is a critical area for pharmacy operators to watch over the coming weeks.

Your main priorities are to protect the health of yourself, employees and customers and then to reduce the risk of the financial impact to your business. Here are some points to help focus your thoughts:

  1. Keep your eye on Government advice: https://www.gov.uk/government/topical-events/coronavirus-covid-19-uk-government-response
  2. Hold a meeting with key team members and work through the agenda provided.
  3. Summarise the actions and allocate responsibility to make them happen.
  4. Talk to us – we are all in this together.

Coronavirus Statutory Sick Pay Rebate Scheme Launching

Employers will be able to make claims through the Coronavirus Statutory Sick Pay Rebate Scheme from 26 May. The government has announced a new online service will be launched on 26 May for small and medium-sized employers to recover Statutory Sick Pay (SSP) payments they have made to their employees.

Employers are eligible if they have a PAYE payroll scheme that was created and started before 28 February 2020 and they had fewer than 250 employees before the same date.

The repayment will cover up to 2 weeks of SSP and is payable if an employee is unable to work because they:

  • have coronavirus; or
  • are self-isolating and unable to work from home; or
  • are shielding because they have been advised that they are at high risk of severe illness from coronavirus

You can check if your business can claim back Statutory Sick Pay paid to employees due to coronavirus (COVID-19) here:

https://www.gov.uk/guidance/claim-back-statutory-sick-pay-paid-to-employees-due-to-coronavirus-covid-19

This scheme will allow small and medium-sized employers, with fewer than 250 employees, to apply to HMRC to recover the costs of paying coronavirus-related SSP.

Employers will be able to make their claims through a new online service from 26 May. This means they will receive repayments at the relevant rate of SSP that they have paid to current or former employees for eligible periods of sickness starting on or after 13 March 2020.

To prepare to make their claim, employers should keep records of all the SSP payments that they wish to claim from HMRC.

Further information

The current rate of SSP is £95.85 per week (before 5 April the rate was £94.25).  Employers can choose to go further and pay more than the statutory minimum. This is known as occupational or contractual sick pay.

Where an employer pays more than the current rate of SSP in sick pay, they will only be able to reclaim the SSP rate.

The scheme covers all types of employment contracts, including:

  • full-time employees
  • part-time employees
  • employees on agency contracts
  • employees on flexible or zero-hour contracts

Note: Other SSP eligibility criteria apply.

Connected companies and charities can also use the scheme if their total combined number of PAYE employees is fewer than 250 on or before 28 February 2020. Employees do not have to provide a doctor’s fit note for their employer to make a claim under the scheme.

Employers can furlough their employees who have been advised to shield in line with public health guidance and are unable to work from home, under the Coronavirus Job Retention Scheme. Once furloughed, the employee should no longer receive SSP and would be classified as a furloughed employee. Where an employee has been notified to shield and has not been furloughed, the rebate will compensate up to 2 weeks of SSP from 16 April 2020.

If you need assistance with a claim please contact us.

Updated Guidance For Employees, Employers and Businesses

The Government’s updated guidance will assist employers and businesses in providing advice to their staff on:

  • coronavirus COVID-19
  • how to help prevent spread of COVID-19
  • what to do if someone has symptoms of COVID-19 has been in business settings
  • eligibility for sick pay

See:  https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19?utm_source=3aebe15f-0b6d-4116-84e6-57a28c3d1250&utm_medium=email&utm_campaign=govuk-notifications&utm_content=immediate

The Government’s updated guidance also provides details of support available to businesses including:

  • a Coronavirus Job Retention Scheme
  • deferring VAT and Self-Assessment payments
  • Self-employment Income Support Scheme
  • statutory sick pay relief package for small and medium-sized enterprises (SMEs)
  • a 12-month business rates holiday for all retail, hospitality, leisure and nursery businesses in England
  • small business grant funding of £10,000 for all business in receipt of small business rate relief or rural rate relief
  • grant funding of £25,000 for retail, hospitality and leisure businesses with property with a rateable value between £15,000 and £51,000
  • the Coronavirus Business Interruption Loan Scheme to support long-term viable businesses who may need to respond to cash-flow pressures by seeking additional finance
  • a new lending facility from the Bank of England to help support liquidity among larger firms, helping them bridge coronavirus disruption to their cash flows through loans
  • the HMRC Time To Pay Scheme to help with tax

It is clear that this guidance will be updated regularly as the situation changes and you are asked to refer to the web page above regularly for updates.

Market Entry Applications – Restrictions to be Lifted?

There appear to be no guarantees at this stage but according to the PCSE website – As of 1 June 2020 it is expected that the full Market Entry function will be restored. However, it is likely that some applications will take longer than the current regulatory timescales to process as the Market Entry teams work through the backlog of applications.

Life Assurance Scheme Confirmed Extends to Team Members As Well As Pharmacists

The NPA, alongside many other organisations, has been seeking clarity from Government on the Life Assurance Scheme and Pharmacy Team members. DHSC has now formally confirmed that community pharmacy team members are included within the same eligibility criteria that apply to any health care worker.

https://www.npa.co.uk/news-and-events/news-item/uk-government-confirms-the-life-assurance-scheme-for-pharmacists-and-pharmacy-team-members/


Health and Wellbeing of the Adult Social Care Workforce

The Government has issued advice for those working in adult social care on managing your mental health and how employers can take care of the wellbeing of their staff during the coronavirus outbreak. More info can be found at the following link:

https://www.gov.uk/government/publications/coronavirus-covid-19-health-and-wellbeing-of-the-adult-social-care-workforce?utm_source=d49d25b1-8b6d-4079-a9be-a21c447364a9&utm_medium=email&utm_campaign=govuk-notifications&utm_content=immediate


Business Rates Re-Valuation Postponed – England

A revaluation of business rates in England will no longer take place in 2021 to help reduce uncertainty for firms affected by the impacts of coronavirus. Legislation had been introduced to bring the next revaluation forward by one year from 2022 to 2021 but following the recent economic impacts of the coronavirus pandemic, ministers want to ensure businesses have more certainty during this difficult time. See the link below for more detail.

https://www.gov.uk/government/news/business-rates-revaluation-postponed?utm_source=97f7632c-4dff-413d-af5a-88285fa58734&utm_medium=email&utm_campaign=govuk-notifications&utm_content=immediate


Temporary VAT Zero Rating on PPE

The Government has introduced this measure to and provides more information at the following web page:

https://www.gov.uk/government/publications/revenue-and-customs-brief-4-2020-temporary-vat-zero-rating-of-personal-protective-equipment-ppe/revenue-and-customs-brief-4-2020-temporary-vat-zero-rating-of-personal-protective-equipment-ppe

In addition, Hutchings have received the following helpful advice on how Pharmacists might deal with this practically from an experienced sector operator;

FACE MASKS ZERO RATED 1st May 2020 to 31st July2020

The chancellor has announced on 1st May that all PPE will be zero rated for a period of three months from 1st May 2020.

Please estimate your stock as at 1st May 2020 which you would have bought at standard rated. Your sales of these will be zero rated until all such stock is exhausted.

 You need to treat these sales in the same way as you do for private prescriptions or Tena pants, where you buy standard rated and sell zero rated.

Any new stocks will come at zero rated until 31st July. You need to treat this in the same manner as your zero rated purchases like drinks and zero rated sales using your formula, if you are using normal cash register. You may need to revise your formula temporarily if you are selling quite a lot of masks.

If you are using EPOS, you will need to change these sales to zero rated for three months.

You can now reduce your price of the present stock by 16% and make the same profit.

The above is our understanding. Please take advice from your accountants.

Pharmacists included in NHS Life Assurance Scheme

Matt Hancock confirmed in a tweet yesterday that community pharmacists WILL be included in the scheme which offers families of NHS workers who die after contracting Covid-19, a cash sum of £60,000. It is expected that this does NOT extend to all pharmacy team members but more information will hopefully flow.

Latest Government News On Support Available

The Government has now outlined in one place the supports available to businesses and individuals in the UK.

The page help businesses find out how to access the support that has been made available, who is eligible, when the schemes open and how to apply. It includes:

  • Paying your employees
  • Paying Sick pay
  • Tax deferrals
  • Business rates relief
  • Business support grant funds
  • Support for the Self Employed
  • Support for larger businesses

There is also a new “Support Finder Tool” that has launched – more detail below…

Click here to visit this Government webpage (screen grab below)

In addition to this, the Government have also launched an interactive “Coronavirus Support Finder Tool” which will help businesses and self-employed people across the UK to quickly and easily determine what financial support is available to them during the coronavirus pandemic. A simple questionnaire takes business owners a few minutes to complete and will signpost them to relevant government financial support.

The Support Finder Tool can be found directly by visiting:

https://www.gov.uk/business-coronavirus-support-finder

Market Entry Applications

At the time of writing there has been a number of messages regarding the processing of market entry applications and these being halted from 25th March. The messages haven’t been particularly clear and despite trying to seek clarifications in respect of existing applications vs new applications e.t.c, it has proved difficult as some sporadic processing has been observed.

We have spoken with Conor Daly at Rushport Advisory today (www.rushport.co.uk), Conor suggested that for applications that have been submitted previously, the entity that is already on the pharmaceutical list (likely the seller) should contact their local area team and LPC and see if they can encourage the progression of the application despite the difficult circumstances. Each local area team potentially has some discretion here.
We are now however beginning to receive auto-response e-mail communications from PCSE Capita confirming they have ceased processing applications from the 25th and it therefore appears that even if local area teams can take a view on issuing decisions for applications, those decisions may not be formalised by PCSE.

Cash Flow & Rent Payment Concessions

Although the Government have gone some way to assist pharmacy contractors by advancing monies from the global sum to April and May, if you are still struggling with cash flow and your outgoings – rental payments may be a concern.

If you find yourself in this situation, you have nothing to lose from approaching your landlord and discussing your difficulties with them. It’s possible that you may be able to agree deferment of part of your rent obligations for a period of time. PDT solicitors have written the below which is a very good read in respect of tenant options;

https://www.pdt.co.uk/thought-piece/covid-19-tenant-options-under-a-commercial-lease

Business Admin Assistance (VAT Refunds?)

As the current situation with COVID-19 continues to develop, we have been talking to our pharmacy clients to better understand the particular challenges faced by the sector at the moment, and how we can continue to provide support and assistance in this unusual time.

One of the issues brought up repeatedly is the increased demand from customers and how this is increasing pressure on pharmacy staff and owners. Many pharmacy owners have expressed the concern that they have too much to do and ‘there aren’t enough hours in the day’, so they are falling behind with paperwork and administration tasks, such as filing their VAT returns which would allow them to claim the VAT repayments which are vital for cash flow at the moment. Another common worry is the potential impact of the current situation on pharmacy cash-flow, because of the need for extra purchasing, fluctuating supply prices and a degree of uncertainty about eventual remuneration from the NHS.

We are here to support and help you in any way we can. Do give us a call and we would be happy to talk you through your options.

Advice on Bank / Funding Assistance

David Brewer at FTA Finance offers the following advice to pharmacists on funding support;

Temporary Loans

The main High Street Banks have set aside specific funding packages to help minimise disruption to business operations over the coming weeks and months. Designed to help you access additional finance and manage the impact of cash flow challenges or employee absence, these include:-

  • Temporary New or Increased Overdraft Limits  –  in most cases with NO arrangement fee
  • Capital Repayment ‘Holiday’ on existing loans for 3 to 12 months
  • New or increased invoice discounting facilities again in most cases without arrangement fee

These temporary measures could potentially be arranged by simply calling or e-mailing your Bank Manager. Where greater financial support may be needed, details of the new Government backed Coronavirus Business Interruption Loan Scheme (CBILS) are now available  –  www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-scheme-cbils/

The application process varies slightly from Bank to Bank but in a nutshell the Government provides additional security to the lender up to 80% of loan value. The Business will remain 100% liable for the borrowing however the fact 80% is Government backed will provide the Banks with additional comfort on more marginal lending cases. New loan terms generally between 1 and 6 years with no arrangement or security fees and potentially an initial 12 month Capital Holiday.

If you are in any way concerned please do contact the FTA Finance Team (0330 0881157 or [email protected] ) who will be able to run through the options open to you.

Please do get in touch if we can help in any way.

Our business depends on your business and we must all pull together during the next few weeks.