We have been closely monitoring the rapidly evolving situation with regards to COVID-19. As you take measures to ensure the wellbeing of your staff and guests, and continue providing hospitality in a time of huge uncertainty, know that Resy is here to support you. These are challenging times, and we are committed to standing by you during this time of crisis. We will be presenting some tactical strategies that we have aggregated across the industry.
The original post was modified as of 8 April at 12:00 to reflect new updates.
Restaurant Guidance on Closures and Exemptions
Restaurants: Food delivery and takeaway (including hot food) can remain operational.
Cafes: Food delivery and takeaway and services providing food or drink to the homeless can remain operational GOV.UK Guidance: Further Businesses and Premises to Close
The Government’s Economic Measures1. The Coronavirus Job Retention Scheme - The Government will cover the cost of wages backdated to 1 March and will be open before the end of April for at least 3 months. The grants will cover 80% of the monthly salary of retained workers, up to a total of £2,500 a month, plus Employer National Insurance Contribution (NIC) and minimum pension contribution (*More guidance to come about calculating NIC and pensions before scheme is live). This scheme is an overlay on existing employment contract arrangements.
- Furloughed employees must have been hired or contracted by this date. If employees were made redundant since 28 February 2020, they can be rehired and then furloughed. Employees on unpaid leave cannot be furloughed unless they were placed on unpaid leave after 28 February 2020
- Furloughed workers include full time, part time, agency and zero/flexible hour contracts
- The scheme is only for those not working, thus cannot be on reduced hours or pay. Furloughed employees can still volunteer or be in training, as long as it does not provide services to or generate revenue for, or on behalf of your organisation. If the individual is required to complete training during this period, the employer at least needs to be paid the National Living Wage for time spent in training even if it is more than 80% of their salary.
- Employees with 1+ job can be furloughed for each job; the cap applies to each employer
- Company and payroll was in existing on 28 February 2020. The scheme can be accessed at any point during the initial 3 month period
- Discuss with and designate affected employees as "furloughed workers," and notify your employees of this change.
- Submit information to HMRC about the employees that have been furloughed and their earnings
- An employer can top this up, but if done will be liable for the employer (NIC) and pension on the amount added.
- Claim for wage costs via an online portal (not yet live) and receive a grant from HMRC. To claim you will need:
- your ePAYE reference number
- the number of employees being furloughed
- the claim period (start and end date)
- amount claimed (per the minimum 3 week length of furlough)
- your bank account number and sort code
- your contact name
- your phone number
- One claim can be submitted at least every 3 weeks (the minimum furlough period). The amount claimed will be in accordance with payroll amounts when payroll is run - for full and part time salaried employees, use the actual salary before tax as of 28 February 2020. Employees must be paid the full amount of the grant received for their gross pay.
- For variable hourly paid staff, use either the same month’s earnings from the previous year or average monthly earnings from the April 2019-March 2020 tax year, whichever is higher.
- Furloughed rates are based on historic averages. The 2020 National Living Wage which came into effect 1 April 2020, only affects salaries of those currently working.
- If the employee has been employed for less than a year, calculate an average of their monthly earnings since they started worked.
- If an employee only started in February 2020, use a pro-rata of earnings to date.
- Tronc payments are not to be included in the amount paid to furloughed staff.
- Fees, commission and bonuses are also excluded.
- For all the above, once a salary has been ascertained, Employer NIC and minimum automatic enrolment employer pension contributions you are entitled to claim must all be worked out
- If a company is under administration, the administrator can access the scheme
2. Business rates have been abolished for one year for all hospitality businesses. Local authorities will apply the business rates holiday to your bills, no action is required by you.
3. The Government will be deferring next quarter's VAT payment, with no payment from now until mid June. Business will "have until the end of the financial year to repay those bills."
4. Coronavirus Business Interruption Loan Scheme of up to £5m to support any viable business with turnover of up to £45m. Interest payments and any lender-levied fees for businesses will be covered by the Government for an initial period of up to twelve months. This scheme is open and accepting applications as of 23 March 2020. 3 April 2020 updated guidance from the Chancellor
- Lenders are not permitted to request personal guarantees on loans under £250,000.
- For loans over £250,000, personal guarantees will be limited to just 20% of any amount outstanding on the CBILS lending after any other recoveries from business assets. Lenders are prohibited from asking business owners to put their house on the line.
- Extending the CBILS to all viable small businesses affected by COVID-19, not just those to secure regular commercial financing
- The new Coronavirus Large Business Interruption Loan Scheme (CLBILS) will provide a government guarantee of 80% to enable banks to make loans of up to £25 million to firms with an annual turnover of between £45 - £500 million. Loans backed by a guarantee under CLBILS will be offered at commercial rates of interest. More details to come later in April 2020.
5. The government is providing £25k cash grants available per business. The grant can be used to pay for quarterly rent payments due. To qualify the property must have rateable value between £15,000 - £51,0000 to be eligible for a grant of up to £25,000. Local authorities will be contacting eligible businesses directly.
6. £10k small business grant funding to all businesses eligible for Small Business Rate Relief (SBRR) or rural rates relief.
7. Insurance: Per the Chancellor’s press conference on 17 March 2020, all businesses “which do have a policy that covers pandemics, the government’s action is sufficient and will allow businesses to make an insurance claim against their policy.”
8. 14 days statutory sick pay refunded for businesses with fewer than 250 employees.
9. Banks have offered liquidity to support businesses during this period of uncertainty. Refer to your bank’s COVID-19 response pages for more information
The Government has confirmed businesses which miss rent payments on commercial leases will be protected from eviction. Furthermore the Government will extend a 3 month moratorium on lease forfeiture and debt enforcement to commercial leases. Consequently, "no business will be forced out of their premises if they miss a payment in the next 3 months." Landlords will be able to claim for forfeiture, should owed rent not be paid once this clause of the legislation has elapsed.
Across the country there are examples of landlords pledging to help businesses create workable solutions to meet their rent liabilities and "sustain businesses in temporary distress and the communities where they are invested." Some examples below: GOV.UK: Extra protection for businesses with ban on evictions for commercial tenants who miss rent payments
The London Property Alliance which represents 400 Central London Real Estate Companies, has recommended to all members "to help their tenants through short-term issues" to businesses be in a position to resume trade once the crisis is over. Landlords were asked to be flexible to requests for support and recommended to switch to monthly payments to resolve cashflow issues where possible. London Property Alliance Statement
The British Property Federation has urged any hospitality businesses in financial distress ahead of their first rent quarter day on 25 March 2020, to speak to their landlord as soon as possible. The commercial property sector is committed to supporting businesses who through no fault of their own are concerned about their rent liabilities. Support ranges from moving from quarterly to monthly rent payments, rent deferrals or payment holidays. British Property Federation Statement
In addition, some landlords are cancelling Q1 rent.
In short, call your landlord as soon as possible.
Bringing in Revenue
Transition to Delivery and/or Take-away
The government has relaxed planning permissions to allow restaurants to operate as hot food take-aways. (Press Release 17 March 2020). Whether you’re considering adding delivery or take-away, re-tool your menu to produce foods which will still be delicious and safe both after reheating or withstanding long periods of storage, including freezing. From house-made charcuterie to pasta sets and ready meals, sell things which can be easily reheated so your guests can recreate their favourite dishes at home. Create meal plans and educate guests on how to prepare them with written instructions, which you can promote on social media channels.
To avoid wastage, reach out to local authorities (food banks, hospitals, religious institutions, shelters etc) to check if you can supply them with excess foods.
Gift Vouchers & Merchandise
Remind your guests, another way they can support you is they can gift meals to those who are self-isolating. Also of course, encourage your guests to buy gift vouchers for themselves or to gift them to their friends and family for an upcoming date. Apart from vouchers, remind your guests to show support by buying merchandise. Then of course don't forget to have them share on their social channels.
Communicate With Your Guests
As guests increasingly practise social distancing, keep the community you’ve built informed; not only is it a valuable way to let your regulars know of your activities, but as people go out less, retaining a sense of normality will be key in the long run. Advise them why postponing their bookings instead of cancelling is better. Notify your guests about gift card options to help your restaurant with incremental cash-flow to help weather the crisis, and keep on top of social media to help guests keep you top-of-mind, and to promote new dishes or menu items.
Update your guests via email and social channels about your restaurant’s status and any promotions for when trade returns to normal. Use targeted emails; the more specific the better, because it will lead to higher open rates and greater interaction.
Facebook groups have been set up across the UK for volunteers to offer help and for those in need to ask for it. Keep locals apprised of how your restaurant can help people access food in particular for at-risk populations including the elderly, disabled and/or immunocompromised; and find locals offering to help deliver food. A list of some are included at the bottom of this post.
As is helpful, we will continue to pass along information and support you during this period of unprecedented hardship. Please stay safe, and keep washing those hands!
For more information please refer to the following links:
- GOV.UK Business Support
- EY Next Steps: Cash Flow Management
- Grant Funding Schemes: Small Business Grant Fund and Retail, Hospitality and Leisure Grant Fund Guidance
- UK Hospitality Job Retention Scheme Guidance
- CBI Coronavirus Hub
- Food Standards Agency: Distance Selling (including Delivery)
- NHS Coronavirus Guidelines
- UK GOV: Guidance on COVID-19
- F&B Guide
Mutual-Aid Facebook Groups for London BoroughsBarnet
Mutual-Aid Facebook Groups for Outside London