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Government assistance to employers and the self-employed in Guernsey

02 April 2020

This briefing covers measures announced by the States of Guernsey up to 31 March 2020.

Guernsey businesses and self-employed individuals are feeling the implications of COVID-19 and are keen to understand what support is available from the Government and private sector that will help them during these more challenging times.  .

This update provides information and support on the topics and issues that employers and self-employed individuals are now facing for the foreseeable future. 

Following the lockdown of all but essential services from 25 March, the Government has over the last week issued a number of bulletins outlining the support that it is able to provide to employers and the self-employed to minimise the impact of the virus as far as possible and maintain relative stability to the Island’s economy.

The aim of the support measures is to assist businesses to retain staff and where possible working capital and are as follows:

1.         The Coronavirus Payroll Co-funding Scheme

The purpose of the scheme is to enable businesses to retain employees so that when trading restrictions are lifted, the business can recommence as quickly as possible.

The Government will help businesses to pay its employees the equivalent of the Guernsey minimum wage (currently £8.50 per hour). The Government will pay 80% of this amount, representing £238 per week based on a 35 hour week. Businesses are required to pay, as a minimum, the balancing 20% which equates to £60 per week, again based on a 35 hour week. 

Employer eligibility

The scheme is available to all businesses regarded as “not essential” and therefore unable to trade, regardless of the number of employees on the payroll. The business sectors affected are:

·         hospitality and tourism

·         passenger transport and travel

·         rental and leasing of cars and recreational goods

·         recreation and entertainment

·         event management and event services

·         personal service activities such as hairdressers, beauticians and animal boarding

·         commercial fishing

·         private extra-curricular education such as dance and riding schools

·         retail businesses (excluding those relating to retail of essential items such as food, fuel, health and safety and pet products)

·         advertising and marketing

·         construction and manufacturing

Following an update on 15 April 2020, eligibility to access the scheme has been extended to the following business


·         cleaning services

·         window cleaning

·         gardening

·         pet care services

·         waste services (particularly in relation to commercial and building activity)

·         estate agents, architects and building design services

·         facilities and office management services

·         security and cash transfer activities

·         freight and goods transfer (excluding food)

·         dental services and non-essential personal health and hygiene services.


Also, charities and not for profit enterprises will now be eligible for support where employees are unable to work due to restrictions.

The scheme has also now been extended to self-employed individuals regardless of whether they are operating through a company or as a sole trader even if not on the payroll and therefore draws an income direct from an unincorporated business.  

Self-employed individuals will be able to claim 80% of the minimum wage and it is expected that the total amount claimable will be based on a maximum of the usual number of hours worked up to 42 hours per week and a total of £1,241 per month. It should be noted that a sole trader will not be required to register as an employer or provide payslips to be eligible for a claim and the Revenue Service will check the legitimacy of claims against existing contributions and tax information. 

Business sectors excluded from the scheme include regulated finance businesses and professional services businesses such as advocates and accountants.

Support will be available initially for 13 weeks up to the end of June and will be based on an employee’s normal working hours. Relevant employees must be employed by the business on a permanent basis and to be eligible a business must have been in operation from 1 September 2019 or earlier.

Social Insurance and Tax

Businesses are still required to withhold income tax under the ETI scheme and Class 1 Employee Social Insurance contributions. The quarterly Social Insurance contributions and ETI schedules must still be submitted and the payments made by the normal due dates.

However, to ease pressure on businesses, payment of Class 1 Employer Social Insurance contributions for both Quarter 1 (due by 15 April) and Quarter 2 (due by 15 July) can be deferred. A further review as to whether this deferral should continue will be undertaken before the end of June. 

2.         A grant to small businesses and the self employed

The Government will also make a one off grant of £3,000 to smaller businesses and the self-employed (who are single operators) and is in addition to the payments under the Payroll Co-funding Scheme.


To be eligible for the grant a business must be employing no more than 10 employees and must be operating within the sectors defined under the Payroll Co-funding Scheme (but see below) and the business must have been in operation on or before 1 September 2019.  

Whilst the Government is restricting the grant to businesses in the sectors defined above, it has indicated that it will consider requests from businesses in other sectors on a case by case basis. In such cases, the business will need to demonstrate that hardship has been caused by restrictions placed on it as a result of Covid-19.

3.         Class 2 Social Insurance contributions payable by the self-employed

 Self-employed individuals who are carrying on business activity in the defined sectors can also request deferral, or agree staged payment, of their Class 2 Social Insurance contributions for the March and June Quarters. If the March Quarter contributions have already been paid, a refund of those contributions can be claimed.

Income Tax

If income tax is owed, it will be possible to agree a payment plan with the Revenue Service, although at this stage it is unclear whether any late payment surcharges will be waived in these circumstances. 

4.         The Hardship Fund for individuals

 The Government has also set aside funding targeted at individuals who have been laid off as a result of Covid-19 and who would not otherwise qualify under the existing Income Support or Sickness Benefit schemes.

The Hardship Fund is being administered by the Revenue Service and the intention is to provide individuals who have typically been employed within the tourism, hospitality and construction sectors with short term financial support.

The Hardship Fund is intended to encourage individuals impacted to remain on the Island and not leave the labour market so that businesses will be able to rapidly recruit them once restrictions are relaxed.

5.         Loan Guarantee Scheme

To assist with cashflow and liquidity for businesses, the Government is also launching a loan guarantee scheme underwriting commercial lending of £40 million in total. In doing so it will help provide further financial support to local non-financial services trading businesses impacted by Covid-19.

Details of the scheme and eligibility

 ·         The scheme is to be operated initially by the four main clearing banks although others are able to join

·         It will be available until 31 December 2020 and the Government guarantee will be valid for 6 years with an additional 18 months to allow banks to recover the debt and where necessary, a further 6 months to make a claim against the States

·         It will be available to businesses with a maximum turnover of no more than £10 million

·         It applies only to new lending and is not intended to replace existing commercial debt

·         The guarantee provided under the scheme will apply in relation to 80% of the total bank lending

·         The qualifying loans and overdrafts will be for between £5,000 and £500,000 and banks are able to lend up to £250,000 without requiring security from the borrower.

·         Banks will be required to report to the Government in relation to the number of loans and the amount lent as well as any applications that are declined.

Guidance is continually being updated as the situation evolves.  Our tax advisers are closely monitoring developments and will provide an update as and when any changes are introduced.

BDO Global has collaborated to create an overview tool, of the fiscal and financial measures being introduced across the globe and can be accessed here BDO Global COVID-19 Crisis Hub