We know that many of our customers have been hugely impacted by the pandemic, and the changing restrictions put in place across the country. To help, there are a number of measures which have been put in place by the government to support businesses at this time.
This is just a brief overview of the main schemes that may be available to you, so please seek full advice from government and local authority bodies if you need more information.
Budget 2021 measures
A number of measures were announced by Chancellor Rishi Sunak in the Budget to help businesses, including a number of extensions to some vital schemes.
The Restart Grant scheme is designed to support businesses in ‘non-essential’ retail, hospitality, leisure, personal care and accommodation sectors by providingt them with a one-off grant that will help them reopen safely as restrictions are lifted.
The Closed Business Lockdown Payment (CBLP)
This payment specifically designed to help businesses forced to close due to national lockdown restrictions imposed on 5th January 2021.
The Additional Restrictions Grant
The ARG is in place to support businesses not covered by other grant schemes, or where additional funding is needed.
The government has published guidance on VAT deferral payments, with businesses now able to pay any outstanding VAT over 11 reduced instalments between now and March 2022. This could be a way for struggling businesses to reduce overheads for a period of time.
£4.6 billion lockdown grants for retail, hospitality & leisure businesses
The Chancellor has announced that businesses in the retail, hospitality and leisure sectors are to receive a one-off grant of up to £9,000 per property. This is in addition to other grants worth up to £3,000 for closed businesses and up to £2,100 per month upon reopening for businesses impacted by lockdown and previous restrictions.
Coronavirus Business Interruption Loan Scheme for smaller businesses
This scheme enables UK businesses, including start-ups, with an annual turnover of up to £45m to borrow up to £5m – interest-free for 12 months. The deadline for applications has been extended to 31st January 2021 for this support.
Note: The CBILS loan falls under a British Business Bank (BBB) scheme which means the Government provides the lender with a guarantee for 80% of each loan (subject to a per-lender cap on claims) and covers the cost of the first 12 months of interest.
Job Retention Scheme
If you cannot maintain your workforce because your operations have been affected by coronavirus, you can put employees on furlough and apply for a grant to cover 80% of their usual monthly wage costs, up to a maximum of £2,500 per month.The Coronavirus Job Retention Scheme has been extended until 31 April 2021, with a government review set for January 2021.
Help during local restrictions
Local Restrictions Support Grant (Closed Businesses)
The LRSG has been updated to supports those that have been closed due to the latest national restrictions, making businesses such as night clubs and entertainment business are eligible for a coronavirus grant due to national restrictions.
Local Restrictions Support Grant (Open Businesses)
Even if you haven’t been forced to close during the lockdown period, you may still be eligible for a grant under the LRSG scheme.
Apprentice Scheme (England only)
If you hire a new apprentice aged 16-24 before January 2021, you’ll receive £2,000, or £1,500 if you hire a new apprentice aged 25 or over. These amounts will be in addition to the existing £1,000 incentive already offered by the government for new 16-18 year-old apprentices. A Traineeship Scheme (England only) is also available, which means you’ll receive £1,000 if your business creates any new traineeship placements.
Kickstart Scheme (England, Scotland and Wales only)
This is an employment support scheme designed to help young people who have been claiming Universal Credit and are at risk of long-term unemployment – it also gives struggling businesses the opportunity to welcome new employees to help them continue operating effectively by taking advantage of three key incentives.
The government will cover:
- The cost of the first six months of a new 16-24 year-old employee’s wages (at 25 hours a week), at the applicable minimum wage
- The associated employer National Insurance contributions for that employee
- The minimum automatic enrolment pension contributions for that employee
Note: Applications must be for a minimum of 30 placements, but organisations that are unable to offer this number on their ow can partner with each other to reach the minimum number.
£750m coronavirus fund for frontline charities
Funding is available for frontline charities across the UK. Around half of this will be directly allocated by government departments to help charities provide key services and support vulnerable people during the pandemic, while the remainder will go to small and medium-sized charities.
Support for SMEs focused on research and development
Designed to support innovative firms impacted by the pandemic, the government is providing £750m of targeted support for small and medium sized businesses focusing on R&D.
Innovate UK, the national innovation agency, will accelerate up to £200 million of grant and loan payments for its 2,500 existing Innovate UK customers (you will need to opt-in), and support is also available for the 1,200 firms not currently in receipt of Innovate UK funding.
Bounce Back loan scheme for small businesses
To help small businesses recover from the fallout of the pandemic, this ‘fast-track finance’ means businesses can apply for Bounce Back loans worth up to 25% of their turnover (max £50,000) – with the government giving a 100% guarantee for the loan and paying any fees and interest for the first 12 months (when no repayments will be due). Following the initial 12 month period, the interest rate will be set at 2.5% a year. Loans generally arrive within 24 hours of approval, and the deadline for applications has been extended to 31st January 2021.
Note: A ‘Pay as you Grow’ scheme gives businesses that borrow a Bounce Back Loan to repay it over 10 years instead of 6 years to reduce monthly payments. Businesses will also have the option to move to interest-only payments for periods of up to 6 months, or to pause their repayments entirely for up to 6 months.
We have compiled this quick guide to help our customers and their associates navigate a challenging time for their businesses. Financial support is subject to change and JLA are not in a position to provide financial advice, so please seek professional and qualified assistance if you need to explore any of the options covered above.