What Support Can Small Hospitality Businesses Get from the Government During Lockdown?

By Phil Scoble

Introduction

The bad news of a third national lockdown has left many in the hospitality unable to trade and in a tough situation for the third time in less than 12 months. The Government has offered a range of different financial support for the sector, and in this blog we outline all the schemes that might be available to smaller businesses in the hospitality industry and how to access them.

Help with Staff Wages

The furlough scheme pays up to 80% of a member of staff’s wages if your business had to ask them to stop working or work less because of coronavirus (put them on ‘furlough’).

The government will pay 80% of employees’ usual wages for hours they do not work, up to a maximum of £2,500 per month. The scheme is set to run until 30 April 2021.

For hospitality businesses to claim under the scheme, there are monthly deadlines for each preceding month:

You have until 14th January to submit for employees wages if there were on furlough in December, until February 15th if they were on furlough in January, 15th March for February, 14th April for March and 14th May for April.

For more details, check to see if you qualify by clicking here.

Deferring VAT Until March 31

UK VAT registered bars, restaurants and pubs which had a VAT payment due between 20 March 2020 and 30 June 2020, can defer payment until 31 March 2021.

To see if you are eligible, click here.

Get help with Statutory Sick Pay

If your café, pub or restaurant has paid Statutory Sick Pay for employees who are off sick, self-isolating or shielding because of coronavirus, you can claim it back. This scheme covers up to 2 weeks of SSP for every eligible employee.

A business is eligible if it complies with both of these conditions:

  • It is based in the UK
  • It has had fewer than 250 employees since 28 February 2020

To claim back SSP, click here.

Christmas support payments for pubs

If your pub was in tier 2 or tier 3 between 2 December 2020 and 29 December 2020 you may be eligible for a payment of £1,000.

This is additional funding to any other funding you may be eligible for.

A pub is eligible if it:

  • is in England
  • was in tier 2 or tier 3 at any point between 2 December 2020 and 29 December 2020
  • has less than 50% in revenue from food sales (you may be asked to provide accounting evidence)

The deadline for businesses to apply (through their local authority) is 31 January 2021.

To see if you are eligible, click here.

Business rates holiday for retail, hospitality and leisure

Retail, hospitality and leisure businesses will not have to pay business rates for the 2020 to 2021 tax year.

You do not need to do anything. If you are eligible, your local council will apply the discount automatically.

The discount applies to shops, restaurants, cafés, bars and pubs, cinemas and live music venues, leisure or assembly properties – i.e. sports clubs, gyms or spas, and hospitality properties – i.e. hotels, guest houses or self-catering accommodation.

If you think you are eligible and have not received a discount, contact your local council by clicking here.

Coronavirus Business Interruption Loan Scheme

You can get loans and other kinds of finance of up to £5 million for small or medium-sized hospitality businesses or if you are self-employed in the hospitality industry, such as a chef.

A hospitality business is eligible for this scheme if both the following apply to it:

  • it is based in the UK
  • it has a turnover of less than £45 million per year

It must also:

  • be considered viable by a lender, if not for the current pandemic
  • show it has been negatively affected by coronavirus

The scheme is open until 31 January 2021.

Find out how to apply for the Coronavirus Business Interruption Loan Scheme

Coronavirus ‘Bounce Back’ Loan

Small hospitality businesses and self-employed individuals can borrow between £2,000 and £50,000 under this scheme.

The government will guarantee 100% of the loan and for the first 12 months you will not have to pay any fees or interest or make repayments.

If you already have a Bounce Back Loan but borrowed less than you were entitled to, you can top up your existing loan to your maximum amount. You must apply for the top-up by 31 January 2021 when the scheme closes.

A business is eligible if it:

  • is based in the UK
  • was established before 1 March 2020
  • has been negatively affected by coronavirus

Find out how to apply for a Coronavirus Bounce Back Loan by clicking here.

Support for businesses paying tax: Time To Pay Service

If you cannot pay your tax bill on time because of problems caused by coronavirus, you may be able to delay it without penalty using HMRC’s Time to Pay service.

You might be eligible if your UK business:

  • pays tax to the UK government
  • has outstanding tax liabilities

To get more information on what to do if you can’t pay your tax on time click here.

Create job placements with the Kickstart Scheme

The Kickstart aims to create new 6-month job placements for young people who are currently on Universal Credit and at risk of long-term unemployment. Your business can get support to create these placements. The scheme is open to all organisations.

It pays:

  • 100% of the relevant National Minimum Wage for 25 hours a week
  • employer National Insurance
  • minimum automatic pension enrolment contributions
  • £1,500 per job placement for setup costs, support and training

You need to apply for a minimum of 30 placements, but you can partner with other organizations to create them.

Click here to see if you could apply for a Kickstarter grant.

Grants available from your local council

There are grants, available from local councils, for businesses that were closed by law and schemes for businesses that stayed open:

Local Restrictions Support Grant (Closed addendum)

If your business has been closed by law since 5 November 2020 because of national coronavirus restrictions, you could be eligible for a grant of £9,000. The grant covers your business being shut between 5 November and 2 December 2020.

Businesses that are required to close due to national restrictions as of 5 January 2021 might also be eligible for a one-off grant of up to £9,000.

The value of the grant depends on the rateable value of your property.

Check to see if your business is eligible by clicking here.

Local Restrictions Support Grant (for closed businesses)

If your business was in a tier 2 or 3 after August 2020, and closed because of restrictions, you might be eligible for a grant, the amount of which depends on the rateable value of your property.

You can claim for each 14-day period your business was closed for.

To see if you are eligible for one of these grants, click here.

Local Restrictions Support Grant (for open businesses)

If your pub, restaurant or cafe stayed open between 1 August and 5 November 2020 in tier 2 or tier 3, you might be able to get a grant from your local council. To claim, you will need to demonstrate that your business was negatively affected by coronavirus.

How much you get will be based on the rateable value of your property.

To check if your open business is eligible click here.

Additional Restrictions Grant

Cafes, pubs, restaurants and other hospitality businesses that have been negatively affected by coronavirus can claim these grants, which are administered by your local council.

Your council will decide which hospitality businesses are eligible and how much they are entitled to.

Click here to find out more about these grants.

To contact your local council, check out this full list of local government websites and contacts.

Conclusion

These schemes from the government are designed to help hospitality businesses like yours stay viable and help with the recovery that will come after the successful rollout of the COVID vaccination program – we hope that this post has helped you understand what schemes are available to you and that they help you make your business stronger and more secure in 2021.

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