CEO Update - Economic Support Package

23 March 2020

Dear All, 

A quick update from the team at the TSA. First and foremost, hope you and your loved ones are keeping well, which must be the number one focus for all of us during this time.  Please ensure you take responsibility for yourself and all those whom you may come in contact with by following the government guidelines which we understand may be very challenging within our industry but simply do what you can. Let us know your thoughts and we will ensure to drive the conversations and keep you posted on all relevant updates. We have been receiving overwhelming support from all corners of this fantastic industry. Below are a few simple practical steps we all should be able to undertake to reduce the spread of the virus.

  • Space staff out where possible
  • Reduce the number of small lane feeding
  • Ensure you wash all bags and hampers
  • Wipe down cages and where possible segregate clean and dirty – easier now to do with reduced volumes.
  • For hospitality laundries with low volumes – try to keep your shift patterns to the same staff. For example, the Monday shift consists of all the same staff.

Described below are a few items that we hope you may find useful; I am sure many of you will be aware of these already but just in case.

Coronavirus Job Retention Scheme

This will apply to all UK employers.  There is still a lot of “small print” that needs to be answered but this is the information currently on the government website and has not changed in the last few days.

You will need to:

  • designate affected employees as ‘furloughed workers,’ and notify your employees of this change - changing the status of employees remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation
  • submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal (HMRC will set out further details on the information required)

HMRC will reimburse 80% of furloughed workers wage costs, up to a cap of £2,500 per month. HMRC are working urgently to set up a system for reimbursement. Existing systems are not set up to facilitate payments to employers.

The questions we are trying to get answers for you are listed below as we are aware it is very close to month-end and many of you will be or have run the wages for March.  These are only based on desktop research and conversations. If you have more detailed information on any of the following and willing to share, please send it through.

  • Can I furlough an employee for four days a week and ask them to come in for one day a week – e.g. if you have very low volumes, you may want to get minimum staff in on a daily basis but create a rota to share the work around? Unlikely, but we think this should the logical way forward and you should be able to do this; if not, we will lobby to get it.
  • Can a person who is furloughed take alternative employment?  Again, we think this will be unlikely especially if they are under earning under the threshold.
  • Is the cap a total of all costs relating to wages– employers NI, employers pension cost etc.?  We think it is.
  • What accruals continue (if any) while an employee is furloughed? 
  • Can directors be furloughed – currently we think unlikely as the scheme is mainly designed to assist workers employed but we will lobby for this to be changed?
  • How do I pay for those on zero hours contract?  – details are still to follow but we believe they will be covered and likely to be average earnings for February.
  • Is the 80% pay only based on contracted wages or will it be based on previous earnings?  If you have someone below the threshold on earnings but their basic included commission can you pay both elements of their wages?
  • Do I have to prove a furloughed employee cannot / has not worked?
  • What if I have staff who will not come in due to a perceived risk of working in a laundry  - technically they are breaching their employment contract so could be disciplinary – if they are vulnerable then we think likely you furlough them but need more advice.

Sick Pay

The government is providing support for small-and medium-sized businesses and employers to reclaim Statutory Sick Pay (SSP) paid for sickness absence due to COVID-19. The eligibility criteria for the scheme will be as follows:

  • refund will cover up to 2 weeks’ SSP per eligible employee who has been off work because of COVID-19
  • currently it only applies to employers with fewer than 250 employees - the size of an employer will be determined by the number of people they employed as of 28 February 2020
  • you will be able to reclaim expenditure for any employee who has claimed SSP (according to the new eligibility criteria) as a result of COVID-19
  • you should maintain records of staff absences and payments of SSP, but employees will not need to provide a GP fit note. If evidence is required by an employer, those with symptoms of coronavirus can get an isolation note from NHS 111 online and those who live with someone that has symptoms can get a note from the NHS website
  • eligible period for the scheme will commence the day after the regulations on the extension of SSP to those staying at home comes into force
  • currently there is no repayment mechanism set up – they state they will work with employers over the coming months to set up the repayment mechanism for now this will have a negative impact on your cash flow.

VAT & and Income Tax payments

Basically, it appears you should not be paying any VAT payments due to HMRC which for some of you will have a significant positive cash flow impact but for those that have just paid it no help for 3 months.  Below is from the gov.uk website.

VAT

For VAT, the deferral will apply from 20 March 2020 until 30 June 2020.

Eligibility - All UK businesses are eligible.

How to access the scheme - This is an automatic offer with no applications required. Businesses will not need to make a VAT payment during this period. Taxpayers will be given until the end of the 2020 to 2021 tax year to pay any liabilities that have accumulated during the deferral period. VAT refunds and reclaims will be paid by the government as normal.

Time to Pay

HMRC have also scaled up their Time to Pay offer to all firms and individuals who are in temporary financial distress as a result of Covid-19 and have outstanding tax liabilities.  The website states that arrangements are agreed on a case-by-case basis.  If you have missed a tax payment or you might miss your next payment due to COVID-19, please call HMRC’s dedicated helpline: 0800 0159 559.  If you’re worried about a future payment, please call us nearer the time.  – I think this will apply to us all

Insurance

If you are one of the very few businesses that have cover for both pandemics and government-ordered closure you should now be covered. Most businesses are unlikely to be covered, as standard business interruption insurance policies are dependent on damage to property and will exclude pandemics, but we think it may be worth making you all claim and see their response to it.

Business Rates

We are currently lobbying to get hospitality laundries included with the schemes.

 

General Update

Communication

The team at the TSA are using every platform available to us to reach out to as many people and organisations in the textile services industry. We have had very encouraging engagement on Twitter and LinkedIn. We will now be sharing most information on Facebook to effectively reach all demographics.

In the current crisis,  we are inviting all laundries to join the TSA at a time when we need to act as one. We are currently developing a list of non-member laundries to keep them updated and provide a flavour of the TSA membership benefits. If you are aware of any laundries, please email emma.andresson@senugo.com so that we can actively engage them in our conversations.

We are looking at facilitating Webex meeting around specific topics. We will attempt to schedule  focus-groups (for example, a web conference for the suppliers’ group) to keep the numbers manageable and we will repeat across all groups depending on demand. Shyju will send more out on this later.

I will try and send short relevant briefing every couple of days or as things change.

Lobbying

So far, the essential worker status for Healthcare operators seem to be accepted and we are on the list.  The self-certification scheme for laundries servicing other essential sectors such as food, care homes, MOD, pharmaceutical etc seems to also be working. To date, we have had no verification problems but please do not abuse it.

If you need any further information on the self-certification scheme or if you have any other queries, please do not hesitate to let us know.


Best regards,


David Stevens

Chief Executive, Textile Services Association
Spaces | The Bower
4 Roundwood Avenue
Stockley Park
London UB11 1AF


T: +44 (0)20 3151 5600
W: senugo.com

Championing the Textile Services Industry


The Textile Services Association. Registered in United Kingdom Reg. No. 169160. VAT Reg. No. 398 6956 63 | The TSA’s logo is a registered UK Trade Mark no. 3307134.

 

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