A shopper wearing a face mask leaves a Morrisons supermarket in Southwark, south London. AFP
A shopper wearing a face mask leaves a Morrisons supermarket in Southwark, south London. AFP
A shopper wearing a face mask leaves a Morrisons supermarket in Southwark, south London. AFP
A shopper wearing a face mask leaves a Morrisons supermarket in Southwark, south London. AFP

Ocado, Morrisons, Next: Britain's retailers get tougher on the unvaccinated


Paul Carey
  • English
  • Arabic

Staff at some UK-based retailers are starting to feel the financial impact of being unvaccinated.

A growing number are toughening their stance against unvaccinated staff who come into contact with infected people, as they seek to cut costs from the long-running pandemic.

British supermarket chain Morrisons and online counterpart Ocado, as well as clothing retailer Next and Swedish home furnishings giant Ikea, have all reduced sick pay for unvaccinated UK staff required to isolate after Covid contact.

More than 52 million people in the UK (90.7 per cent) have received a first vaccine dose, while 36.5 million (63.6 per cent) have already had their third.

The UK also currently operates a Covid pass system for entry to large venues. However, Boris Johnson is expected to announce a review of those rules, known as Plan B, as early as today.

On Tuesday, the UK recorded 438 further deaths from coronavirus, the highest number of daily fatalities since February of last year.

The country also reported a further 94,432 cases, down from 120,821 a week ago, but higher than at the weekend, when infections hit their lowest levels in a month.

The issue of how the unvaccinated should be treated has been in focus after unvaccinated tennis player Novak Djokovic's deportation from Australia.

Ikea offers full company sick pay to both vaccinated staff and unvaccinated staff who have special circumstances, it said in a statement on its policy for virus absences.

An employee prepares an order at an Ikea store in Britain. Getty Images
An employee prepares an order at an Ikea store in Britain. Getty Images

Unvaccinated staff without mitigating circumstances, such as pregnancy or medical reasons, will be paid statutory sick pay, which is the legal minimum.

Next, Ocado and Morrisons also confirmed in separate statements that they operate a broadly similar policy.

However, unvaccinated staff with no mitigating reason will only receive standard company sick pay if they test positive for Covid-19.

Under current rules, fully vaccinated individuals in Britain are not legally required to isolate after coming into contact with a person who tests positive, but unvaccinated individuals must self-isolate for 10 days.

All people with Covid-19 must self-isolate for five days, after which they can finish if they test negative on days five and six and do not have a temperature.

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Position: legal consultant with Al Rowaad Advocates and Legal Consultants.

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Ten tax points to be aware of in 2026

1. Domestic VAT refund amendments: request your refund within five years

If a business does not apply for the refund on time, they lose their credit.

2. E-invoicing in the UAE

Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption. 

3. More tax audits

Tax authorities are increasingly using data already available across multiple filings to identify audit risks. 

4. More beneficial VAT and excise tax penalty regime

Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.

5. Greater emphasis on statutory audit

There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.

6. Further transfer pricing enforcement

Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes. 

7. Limited time periods for audits

Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion. 

8. Pillar 2 implementation 

Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.

9. Reduced compliance obligations for imported goods and services

Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations. 

10. Substance and CbC reporting focus

Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity. 

Contributed by Thomas Vanhee and Hend Rashwan, Aurifer

Updated: June 21, 2023, 9:14 AM