Govt Offers Firms New Payments To Stay Afloat

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Chancellor Rishi Sunak has promised businesses operating in the retail, leisure and hospitality sectors that they will receive new payments to help them keep afloat until spring.

The Treasury has said the payments will be worth up to £9,000 per property as Mr Sunak is ‘committed to protecting jobs and supporting businesses’. Industry groups, although welcoming the new help as a promising start, warned the money would still be insufficient to save many firms from going under.

The payments will be in addition to business rates relief and the furlough scheme which has been extended until the end of April. Firms will not be required to repay the money. Mr Sunak will consider whether and how to extend relief packages in the Budget on March 3.

The Budget, he said, will be ‘an excellent opportunity to take stock of the range of support we have put in place and set out the next stage of our economic response’.

Industry responses

Tony Danker, Director-General of the CBI business group, had warned earlier that leaving additional support until the Budget could be too late for many firms, claiming that ‘the comprehensive restrictions require a new comprehensive response’.

This is a fear that has been voiced by other business groups, such as the British Chambers of Commerce (BCC) and the Federation of Small Businesses (FSB).

BCC Director-General, Adam Marshall, warned many smaller firms would not qualify for aid and ‘will struggle to understand how the new top-up payment will help them overcome their cashflow problems. He urged support to be extended to companies in other sectors who are also experiencing the ‘devastating impact’ of the latest lockdown.

FSB chair, Mike Cherry, agreed that the funds would be a lifeline for many, but ‘do not go far enough to address the scale of the crisis small firms face’. The British Beer & Pub Association, describing the payments as a ‘lifeline’, added that businesses on which pubs rely, such as breweries, would also need support.

New payments available

One-off top-up grant for retail, leisure and hospitality sectors This is given to closed businesses and is based on the premise’s rateable value. Payments are £4,000, £6,000 or £9,000. There is also a £594m discretionary fund for other businesses affected by lockdown. Applications should be made to the local council.

SEISS The Self-Employed Income Support Scheme has been extended to cover the period November 2020 to January 2021 with a second payment covering February to April next year. The first payment covers 80pc of average monthly trading profits or £7,500, whichever is lower. Claims for the November to February grant must be lodged by January 29.

CBILS Small businesses and sole traders with an annual turnover of less than £45m can apply to the Cornavirus Business Interruption Loan Scheme for payments up to £5m. The scheme will remain open until the end of March this year but you will need to show that your otherwise viable business has been negatively impacted by coronavirus.

Deferred VAT If you had a VAT payment due between March 20 and June 30, 2020, you can postpone payment until the end of March this year, or opt into the new VAT deferral scheme when it is launched.

Additional grants, loans and relief

Coronavirus Bounce Back Loan You may be able to borrow between £2,000 and £50,000 if you are a small business or self-employed. The scheme will be open until March 31.

Local Restrictions Support Grant Businesses that were open as usual and then forced to close due to local tier restrictions may be able to obtain a cash grant from their local council based on the rateable value of their property. This will be available for every 14-day period a business was closed.

Businesses that stayed open but were severely affected may also be eligible.

Additional Restrictions Grant Available to supply chain and events businesses closed or impacted adversely by lockdown. Details can be obtained from local councils.

Business rates relief Businesses in the retail, leisure and hospitality sectors in England do not have to pay business rates for the tax year ending April 5, 2021.

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The Business4Beginners news team consists of several writers who each have their own unique experience in businesses. By keeping their fingers on the pulse, they bring you the latest in news and trends impacting small UK businesses.
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