In December, a £1 billion support package was announced, aimed at mitigating the effects of the Omicron strain on the hard-hit hospitality, leisure and culture sectors of the economy as people are urged to avoid crowded places and work remotely where possible.
The package, announced by the Chancellor on 21 December, will include one-off grants for the hospitality and leisure sector and a sick pay rebate scheme for small and medium-sized businesses across the UK.
The move comes after a sharp decline of up to 60% in December trade for the hospitality sector, which is facing huge uncertainty at what is typically the busiest time of the year.
What support are businesses in England now eligible for?
Businesses in the hospitality and leisure sectors in England will be able to apply for a one-off grant of up to £6,000 per establishment. This will be similar to the cash grants that hospitality businesses were able to apply for earlier in the year when they were forced to close and were unable to trade. Around 200,000 businesses will be eligible for the grants, which local authorities will administer in the weeks ahead.
The Government has also pledged to cover the cost of statutory sick pay for employees of small and medium-sized businesses across the UK who need to take Covid-related sick leave by reintroducing the government is also reintroducing the Statutory Sick Pay Rebate Scheme (SSPRS). The scheme will reimburse firms with fewer than 250 employees the cost of statutory sick pay for Covid-related absences of up to two weeks per employee.
In addition, more than £100 million in discretionary funding will be provided to local authorities to support other businesses through the Additional Restrictions Grant, (ARG). Local authorities will be able to use their discretion to allocate funding to local businesses most in need – with the national funding being designed as a 'top up' scheme for local authorities which have already distributed most of their existing allowance.
A further £30 million of funding will be provided through the Culture Recovery Fund, which cultural organisations in England – including theatres, orchestras and museums – will be able to apply for throughout the winter period up until March 2022.
In other measures, HMRC remains ready to support affected businesses through its Time to Pay arrangement and has now been asked by the Chancellor to offer short payment delays to businesses on a case-by-case basis, particularly for those in the leisure and hospitality sectors.
How have the measures been received?
It is felt that the package will provide a much-needed injection of cash for businesses that have seen their most lucrative trading period disappear, as many people cancel Christmas parties and steer clear of pubs and restaurants. The extra £6,000 will help to secure jobs and ensure business continuity.
However, the one-off grant has attracted criticism, with some feeling that the amount is a 'drop in the ocean' compared to the losses that businesses have suffered this month. What's more, with many businesses unable to replace lost wages and tips, staff in the hospitality sector are seeing their hours being cut dramatically – stoking fears that without more substantial intervention, the sector will be forced to cut jobs.
Will there be any support for Scotland, Wales, and Northern Ireland?
The Government has already pledged an £860 million support package for the devolved nations, allowing local authorities to support businesses most in need.
As Omicron spreads, the Government has now decided to double the amount of additional funding available, meaning that a further £450 million of funding will now be available on top of the funding outlined in the Autumn Budget 2021.
Under the scheme, Scotland will now receive a further £440 million, while an additional £270 million and £150 million have been earmarked for Wales and Northern Ireland respectively.
Gerald Edelman’s Business Services Team has extensive experience in assisting clients in the preparation of management accounts and business plans required for various government grant scheme applications. Should you have any queries regarding eligibility please contact one of our team who will be happy to assist you further.