The Chancellor, Rishi Sunak, has announced a new grant package of £4.6 billion to support the hardest hit businesses through the new national lockdown measures and to help sustain jobs. One-off cash grants of up to £9,000 per business premises will be made available to retail, hospitality and leisure sector businesses that have been forced to close as a result of the restrictions. A further £594 million will be made available to local councils to support businesses in their area. The new packages are on top of the ongoing support measures and grants that businesses can already claim.
One-off top-up grants
One-off top-up grants will be made available to retail, hospitality and leisure businesses directly impacted by the restrictions. The grants will be provided on a per-property basis and will be worth up to £9,000 per property.
Existing grants were previously capped at £15,000 to any eligible business operating multiple premises. However, from 1 January 2021 this cap is no longer applicable and does not appear to apply to the new one-off grants either, meaning business owners can claim for each property.
The grants are based on rateable value and will be made available to closed businesses as follows:-
- £4,000 for businesses with a rateable value of £15,000 or under;
- £6,000 for businesses with a rateable value between £15,000 and £51,000; and
- £9,000 for businesses with a rateable value of over £51,000.
We await further guidance on the eligibility criteria and application process.
What about businesses in other sectors?
The Chancellor has announced that a further £594m will be made available Local Authorities and the Devolved Administrations to support other businesses impacted by the new restrictions but not eligible for the one-off grant. The Scottish government will receive £375m and we await further announcements as to how this will be administered.
What other support is available?
The top-up grants are in addition to existing support. In summary, this includes:
- Strategic Framework Business Fund – grant funding is available for businesses that are required to close or significantly change operations due to COVID-19 restrictions. Grants are paid every four weeks under the Temporary Closure Grant or Business Restriction Grant and are administered by local authorities.
- Job Retention (furlough) Scheme – the furlough scheme has been extended until the end of April 2021. More information can be found here.
- VAT and Income Tax payment deferrals – UK VAT registered businesses that had a VAT payment due between 20 March 2020 and 30 June 2020 can defer payment until 31 March 2021.
- Business rates relief – all non-domestic properties in Scotland will get 1.6% relief, which effectively reverses the rate increase for 2020-21. Retail, hospitality and leisure, as well as organisations providing handling services to Scottish airports, will receive 100% rates relief for 2020-21.
- Statutory Sick Pay rebate for SMEs– employers can reclaim SSP they’ve paid for employees who are off sick, self isolating or shielding because of coronavirus. The scheme covers up to 2 weeks of SSP for every eligible employee.
- Bounce Back Loans for small businesses – SMEs affected by coronavirus can apply for a loan of up to £50,000 which will be guaranteed by the UK government.
- Coronavirus Business Interruption Loan Scheme (CBILS) for SMEs – this provides facilities of up to £5 million for smaller UK businesses experiencing lost or deferred revenues, leading to disruptions to their cashflow.
- Coronavirus Large Business Interruption Loan Scheme (CLBILS) – under CLBILS borrowers can borrow up to 25% of turnover, up to a maximum of £200 million.
Further information about sources of support, together with eligibility criteria and applications processes, are available on the Scottish Government’s website here.
This note is based on information available as at 5 January 2021. Further updates will be provided as and when more guidance is available.
Insight from Pamela Muir, Insolvency, Restructuring and Corporate Partner at Thorntons. For more information contact Pamela on 03330 430350 or email pmuir@thorntons-law.co.uk
