The Treasury has reassured many distressed business owners by confirming that a moratorium on commercial evictions introduced in April 2020 will now be extended for another year.

The ban, introduced more than a year ago, has already been extended twice and was due to expire at the end of June but will now remain in place until at least March 2022.

Under the temporary rules, landlords of commercial properties are restricted from evicting tenants and are not permitted to recover rent arrears by selling a tenant’s goods.

Although not much additional financial support has been given in relation to the extension of lockdown restriction until 19 July, the Chief Secretary to the Treasury Stephen Barclay confirmed that help would be offered via the moratorium to struggling businesses.

Speaking in a statement on the economy in the Commons, Mr Barclay said that the extension to the current moratorium “strikes the right balance between protecting landlords and supporting those businesses that are most in need”.

He added: “We will introduce legislation in this parliamentary session to establish a backstop so that, where commercial negotiations between tenants and landlords are not successful, tenants and landlords go into binding arbitration.

“Until that legislation is on the statute book, existing measures will remain in place including extending the current moratorium to protect commercial tenants from eviction to 25 March 2022.”

The Government has reiterated that, where possible, tenants should start to pay rent again under the terms of their lease or as otherwise agreed with their landlords once restrictions are removed on their sector.

While this latest extension is positive news for many businesses, particularly those in hard-hit sectors such as hospitality and leisure, for commercial property landlords it may mean many more months without rental income or the option to evict tenants to bring in new paying businesses.

If you are affected financially by the latest extension to the ban and would like advice, please contact us.

The Coronavirus Job Retention Scheme (CJRS) continues to support many businesses, who are reliant on the financial support it offers to cover the costs of staff on furlough.

Extended earlier this year in the Budget, support from the CJRS will slowly be withdrawn in the next three months before closing altogether at the end of September.

The withdrawal of this scheme could have a substantial financial impact on businesses and so they must be prepared for the changes ahead.

As with the existing scheme, furloughed employees will continue to receive 80 per cent of their usual wages capped at £2,500 a month, or equivalent weekly or daily figures, for usual hours not worked right up until the scheme ends later this year.

However, from 1 July, employers must make a 10 per cent contribution to these costs, as the Government grant will only cover 70 per cent of the costs (capped at £2,187.50).

In August and September, the Government grant will then drop again to 60 per cent (capped at £1,875), meaning that employers must make a 20 per cent contribution to the amount paid to employees.

The calculation of usual wages is still based on the last pay period before the employee became eligible for furlough.

Those dates vary, depending on whether the employee was reported to HMRC on or before 19 March 2020, 30 October 2020 or 2 March 2021.

Any pay rises since an employee’s reference date are not taken into account for any time they are furloughed.

Employers need to make early assessments as to whether they will continue to support furloughed employees going forward, especially if they are considering making redundancies as a result of the withdrawal of funding.

Employers need to remain mindful of their obligations in relation to collective redundancy consultation as, depending on the number of redundancies they intend to make, they may be required to report redundancies to the Secretary of State for Business, Energy and Industrial Strategy either 30 or 45 days in advance of dismissing employees.

If you need assistance with the changes ahead or are concerned about the potential cost implications of the furlough scheme ending, please contact us.