On this page we have summarised the key support that is available for pubs and hospitality businesses as a result of the COVID-19 pandemic. This page will be regularly updated as new schemes are released and/or modified.
Last updated: 6th January 2021
The Coronavirus Job Retention Scheme, also known as the furlough scheme, has been extended to 30th April 2021. Details about the extension are available here.
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The furlough scheme (CJRS) has been extended until the end of April 2021. The level of the grant will mirror the levels available under the CJRS in August, so the Government will pay 80% of wages up to a cap of £2,500 and employers will pay employer National Insurance Contributions (NICs) and pension contributions only for the hours the employee does not work.
Businesses will have flexibility to bring furloughed employees back to work on a part time basis or furlough them full-time, and will only need to cover National Insurance and employer pension contributions.
To be eligible to be claimed for under this extension, employees must have been on an employer’s PAYE payroll by 23:59 30th October 2020. This means a Real Time Information (RTI) submission notifying payment for that employee to HMRC must have been made on or before 30th October 2020.
Neither the employer nor the employee needs to have previously claimed or have been claimed for under CJRS to make a claim under the extended CJRS (if other eligibility criteria are met). Employees employed as of 23rd September (day of Job Support Scheme Announcement) and notified to HMRC by RTI on or before that date, who have since been made redundant can be rehired and placed on the CJRS.
As with the previous CJRS, employers are still able to choose to top up employee wages above the scheme grant at their own expense if they wish.
When claiming the CJRS grant for furloughed hours, employers will need to report and claim for a minimum period of 7 consecutive calendar days.
These grants are aimed at hospitality and leisure businesses and have been established as LRSG (Open) and (LRSG (Closed). In light of the announcement of a lockdown in England from 5th November it has been confirmed that backdated cash grants for businesses in Tier 2/3 areas – businesses in hospitality, leisure and accommodation sectors that have been suffering from reduced demand for a while – will receive backdated grants at 70% of the value of closed grants up to a maximum of £2,100 per four weeks for this period. On the 12th of November the Secretary of State for Business confirmed that monies had been issued to Local Authorities.
Guidance on Local Restrictions Support Grants (LRSG) and Additional Restrictions Grant (ARG) has been issued to Local Authorities by the Government. This sets out the criteria that Local Authorities should apply – it can be found here.
During the second national lockdown in England, the Local Restrictions Support Grant (Open) ceased to apply, and (Closed) was superseded by the conditions set out in this addendum. Equally, in the third national lockdown and any areas in Tier 4 that preceded it, the conditions in this addendum apply. Businesses will not be eligible for multiple versions of the Local Restrictions Support Grants under widespread national restrictions. Local Authorities (LAs) who triggered the Local Restrictions Support Grant (Open) between 1st August and 4th November will still receive their payments for that period.
The Local Restrictions Support Grant (Closed) will move from a 14-day payment cycle to an alternative payment cycle. For 5th November – 2nd December inclusive, a 28-day payment cycle will be applied. Grant funding will be issued to Local Authorities at the beginning of the 28-day payment cycle, which is the first day widespread restrictions come into force nationwide.
Businesses that are eligible are those that have been mandated to close by Government.
The funding local authorities will receive will be based on the number of hospitality, hotel, B&B, and leisure businesses in their area, and will assume that these businesses receive grants equivalent to 70% of the grants for which legally closed businesses are eligible.
These grants are aimed at hospitality, hotel, bed & breakfast and leisure businesses.
It will be up to Local Authorities to determine what precise funding to allocate to each business – the above levels are only an approximate guide.
Local authorities will also receive a 5% top up amount to these implied grant amounts to cover other businesses that might be affected by the local restrictions, but which may not be in the business rates system.
A factsheet for Tier 2 grants is available here.
Each local authority will also receive 5% discretionary “top up” funding, though the eligibility criteria for this remains unconfirmed.
We have drafted template letters for members to send to their local authority and local representatives if grant funding is slow to be issued, the template for local authorities can be downloaded here, and the template for local Members of Parliament can be downloaded here.
The third national Lockdown for England started on 5th January 2021. Hospitality businesses will be closed until at least February half-term (a review will take place in the week commencing the 15th February).
A new set of one-off grants have been announced to support hospitality, retail and leisure businesses to help them “through to the Spring”. (It is not clear what period these one-off grants are meant to cover other than that statement.}
This latest package of support will be comprised of one-off top up payments of:
These payments will be made through local authorities and will be in addition to the Local Restrictions Support Grants already in place. We understand that funds will be made available to local authorities in the w/c 11th January, with authorities encouraged to pay out grants as soon as possible. There will also be money made available for the Scottish, Welsh and Northern Irish Governments as well, though it is not immediately clear whether this is new money for the devolved administrations or not – we are seeking clarity on this.
We have asked BEIS to clarify any State Aid considerations in relation to these additional grants.
An additional £594m of funding is being made available to local authorities for businesses not eligible for the above grants, but nonetheless impacted by the restrictions – businesses should contact their local authorities regarding this fund. In particular, breweries may be able to apply for these funds.
We are expecting fuller guidance to be published by Government by 8th January.
Areas that were placed into Tier 3 were provided with additional funding to support their local businesses. These funds were based upon each affected area, and it is the Local Authority that decides how to use these funds, e.g. if they set up their own grant scheme to support targeted businesses.
The Government has announced an uplift in the claims that can be made under SEISS for November 2020 to January 2021. Details are here.
It has increased support under the third instalment of the UK-wide Self-Employment Income Support Scheme, with people receiving 80% of average trading profits for three months from November to January. Grants will also be paid faster than previously planned – with the claims window opening at the end of November rather than the middle of December.
SEISS grants are calculated over three months, the uplift for November to January means that the maximum grant will increase to £7,500.
The extension will last for six months, from November 2020 to April 2021. Grants will be paid in two lump sum instalments each covering a three-month period. More information is available here.
The application deadline for the Bounce Back Loan Scheme, Coronavirus Business Interruption Loan Scheme, and Coronavirus Large Business Interruption Loan Scheme is being extended until the end of March 2021. The schemes had been previously due to close to applications on 30th November 2020.
The Treasury also announced that rules of the Bounce Back Loan Scheme will be adjusted to allow those businesses who have borrowed less than their maximum (i.e. less than 25% of their turnover) to top-up their existing loan. Businesses will be able to take-up this option from the week commencing 9th November and they can make use of this option once.
A special one-off payment of £1,000 for wet-led pubs in England was announced in December. The Government has published its guidance for Local Authorities on eligibility and payment of the £1,000 Christmas Support Payment (CSP) grant for wet-led pubs. The full guidance is available here.
Key points from the guidance are noted below:
Key exclusions for the grant
Details of grants available to businesses as part of the five-level framework have been published (here).
The First Minister for Wales announced £340m available through the Economic Resilience Fund to support businesses affected by the new changes to the regulations which came into force in December.
This includes a specific fund to support hospitality and tourism businesses. The new Welsh Government support is split into two funds: a £160m Restrictions Business Fund and a £180m sector-specific Economic Resilience Fund grant scheme.
The Restrictions Business Fund will enable eligible businesses in the hospitality, tourism and leisure sectors which pay non-domestic rates (NDR) to access grants of up to £5,000. Businesses not on the NDR system, will be able to continue to apply to local authorities for the Lockdown Discretionary Grant of up to £2,000.
In addition, hospitality, tourism and leisure businesses will be able to access a sector specific Economic Resilience Fund grant scheme. Small and medium sized businesses meeting the criteria could receive up to £100k. Larger Welsh-based businesses could receive up to a maximum of £150k.
Details of the funding available to businesses can be found here.
The Northern Ireland Executive has launched a Localised Restrictions Support Scheme (details here). This Scheme provides financial support to businesses which have been required to close or severely limit operations at their premises under the Health Protection Regulations that have been put in place by the NI Executive. This is one element in the support package offered – details of other support measures are available on the NI Business Info website, here.
The Scheme will apply to businesses, subject to eligibility criteria, including:
There are three levels of support available to businesses who fall into the eligible categories and whose application is successful. The level of support that successful applicants will receive is based on the Total Net Annual Value (NAV) of the property from which the business operates:
We have had a number of queries from members about how they can take advantage of the additional €3 Million Covid-related EU State Aid provision (section 41) in relation to claiming additional local authority business support grants (LRSGs) – up to £3,000 per month and the £1,000 wet-led pub additional Christmas grant.
The UK Government applied to the European Commission to take advantage of this additional provision and this was granted before Christmas. From 1st January, following the end of the transition period on leaving the EU, the UK will be devising its own subsidy regime, details to be announced. This does not impact the application of the 3 Million Euro provision now in place, although this additional EU provision, as we understand it, currently only capture grants issued for the period up to the end of December 2020.
So, can companies now claim for grants up to 3 million Euro and is this on top of previous cap?
Yes, but subject to certain criteria being met and evidence provided (see below). Updated guidance on administering the business support grants has been issued to local authorities including this new provision and the key elements of this. Companies will now need to engage with local authorities regarding the process and the evidence required to apply under this provision.
This is additional funding in addition to the previous scheme that allow for up to €1million euros (€200m de minimis over 3 years + a further €800m cap). Those businesses, who haven’t reached the cap, can still apply to this scheme and this will remain the primary provision for individual pubs and small multiple operators for 2020 grant funding.
As noted above, all the current State Aid provisions, including this one, currently only extend for the period from 1st March 2020 to 31st December 2020. Grants issued covering January 2021 onwards, will likely be subject to the new UK State Aid regime to be announced in due course
Is there is an additional proof of evidence requirement under this new €3 Million provision?
Yes, company turnover must have fallen by at least 30% due to the pandemic and companies will need to provide evidence of this and that they still have uncovered costs, for which they can claim up to 70% in Aid under this provision. Put simply, companies will need to demonstrate a loss in their P&L for this period and then can claim up to 70% of this (90% for micro and small businesses)
A business would have to demonstrate this, and the LA would need to confirm compliance. The money applied for cannot also be used to pay off the same costs that other aid can cover.
State Aid can be complicated and it is important local authorities provide a consistent and pragmatic approach to the evidence base required from companies. For example, the BEIS guidance sets out a requirement to provide evidence of a 30% fall in turnover based on audited or statutory accounts compared to same period (March to December) in 2019.
Of course, It may be a while yet before annual accounts for 2020 are signed-off and if companies have an April-Mar financial year, then this could cause some issues as well, as the 10-month period will span separate periods and data for the current year won’t be available for a while. This provision will therefore need a pragmatic approach to work, so for example some interim data provided from a company accountant that can be followed up at a later date with final accounts would seem a sensible approach. Indeed, this is consistent with the legislation
We are continuing to engage with BEIS in relation to this new provision and seeking additional clarity on their expectations of LAs in relation to this as well as the future State Aid Regime.
We are also seeking dialogue with the LGA to try and ensure a consistent, timely and pragmatic approach by individual LAs.