As the UK enters its tightest restrictions since the outbreak of the pandemic, the Treasury has announced an updated package of support for businesses, to protect jobs and industries during lockdown.
Following the Prime Minister’s address on January 4th, the Chancellor, Rishi Sunak, outlined a further £4.6bn worth of government support for businesses and employees. Here’s a summary of what he unveiled, as well as other, pre-existing (and in some cases, extended) financial support.
New support for businesses
- One-off cash grants will be available to businesses forced to close as a result of the lockdown. This includes those in retail, hospitality and leisure. The grants are worth up to £9,000 per business premises and will support over 600,000 business properties. That’s in addition to the Local Restriction Support Grants (worth up to £3,000 per month) that were already available to businesses, as well as the £2,100 per month which goes to businesses when they reopen. Here’s how the top-up grants break down:
£4,000 for businesses with a rateable value of £15,000 or less.
£6,000 for businesses with a rateable value of between £15,000 and £51,000.
£9,000 for businesses with a rateable value of more than £51,000.
- Almost £600m will also be available to affected businesses from outside these sectors. That money will go to local authorities for the exclusive support of struggling businesses in their area. As above, that is on top of the £1.1bn discretionary funding already given to local authorities.
Existing support for businesses
- The Chancellor also reaffirmed the continuation of both the Self-Employment Income Support Scheme grant, and the Job Retention Scheme (JRS). Both of which were already extended to April 2021. Later this week, we’ll send clients our regular monthly update on how to make a claim for the JRS through Danbro.
- The government will also continue to provide business rates relief (BRR) too. That includes 100% BRR for retail, hospitality and leisure businesses. Meanwhile, VAT increases will remain cancelled for the tourism and hospitality sectors.
- Those who deferred VAT between March 20th 2020 and June 30th 2020 have until the end of March 2021 to pay their deferred VAT in full. If this applies to you, you also have the option of paying the amount back – interest free – in up to 11 smaller monthly instalments. To qualify, you need to opt in by March 2021 and all instalments must get paid by the following March (2022). Please note, though, that the facility to ‘opt in’ for smaller payments is not yet open. We’ll be in touch with our clients as soon as it does with details of how the process works in practice.
- The Bounce Back Loans scheme is also open to applications until the end of March. The scheme allows small and medium-sized businesses borrow between £2,000 and £50,000 depending on their circumstances. The government guarantees 100% of the loan and there are no fees or interest payments to make for the first 12 months (after which, the interest rate will be 2.5% per year). Find out more, here.
- The Business Interruption Loan Scheme (BILS) is also open until March 31st. The BILS helps small and medium-sized businesses to access loans and finance options up to the value of £5 million. The government guarantees up to 80% of the finance to the lender. They also pay all interest and fees for the first 12 months. To check your eligibility for a BILS, click here.
Get in touch
The government will review the latest restrictions in mid-February. And, the Chancellor’s next Budget announcement is scheduled for March 3rd. In the meantime, we’ll continue working hard to bring you the information that matters – fast.
To find out how our Personal Accountants’ could help you and your business, get in touch today.