COVID-19 Government support for hospitality

The Coronavirus Job Retention Scheme, also known as the furlough scheme, has been extended to 31^st March 2021. Details about the extension are available here. Full Government guidance will be published on 10^th November.

Check to find:

• Which employees you can put on furlough to use the CJRS
• If you can claim for your employees’ wages using the CJRS
• What steps you need to take before calculating your claim
• Find out how much you can claim
• For information on claiming for wages through the scheme click here

The furlough scheme (CJRS) has been extended until the end of March 2021 instead of ending on 31^st October.  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 30^th 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 23^rd 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.

The JSS was due to start from 1^st November but has now been postponed whilst the extended CJRS ends.  It currently has two forms JSS Open and JSS Closed. The Government has published a policy paper that outlines some details of both forms (here) but notes that further guidance will be available by the end of October.

JSS Open

A Government factsheet for the JSS Open is available here. The JSS Open is available to those employers that remain opening and trading but have staff working on reduced hours; it allows employers to reclaim part of an employee’s salary for unworked hours.

• An employee must work at least 20% of their normal hours.
• Support will then be given for two thirds (66.67%) of the employee’s unworked hours – the employer will pay 5%, (up to a maximum of £125) and the remaining 61.67% will be paid by the Government (up to a maximum of £1,541.75).
• Employers also pay NICs and automatic enrolment pension contributions in full as a contribution. Employers can top up employee’s wages above the 5% contribution at their own discretion.

JSS Open is available to all eligible businesses across England, Scotland and Wales.  For example, in England this means that it could be used in Tiers 1, 2 and 3.

JSS Closed

This can be claimed by employers that have been legally required to close their premises as a direct result of COVID-19 restrictions set by one or more of the four governments of the UK. JSS Closed will support the wage costs of employees who have been instructed to cease work in eligible (closed) premises. Each employee who cannot work due to these restrictions will receive two thirds of their normal pay, paid by their employer and fully funded by the government, to a maximum of £2,083.33 per month, although their employer has discretion to pay more than this if they wish .

JSS closed is available to all eligible businesses across England, Scotland and Wales.  For example, in England this means that currently it could be used in Tier 3 only because that is the only Tier that requires hospitality premises to close.

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 5^th 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 national lockdown in England, the Local Restrictions Support Grant (Open) will cease to apply, and (Closed) will be superseded by the conditions set out in this addendum. Businesses will not be eligible for multiple versions of the Local Restrictions Support Grant under widespread national restrictions. Local Authorities (LAs) who triggered the Local Restrictions Support Grant (Open) between 1^st August and 4^th 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 5^th November – 2^nd 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.

• Businesses that are open in COVID alert level “high” areas (Tier 2) and “very high” (Tier 3): Open businesses which are experiencing considerable difficulty will be entitled to local authority grant funding from LRSG (Open) as follows:
  • For properties with a rateable value of £15,000 or under, grants of £934 per month.
  • For properties with a rateable value above £15,000 and below £51,000, grants of £1,400 per month.
  • For properties with a rateable value of £51,000 and above, grants of £2,100 per month.
  • These grants will be available retrospectively for areas who have already been subject to local restrictions.

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.

• Businesses mandated to close in COVID alert level “very high” areas (Tier 3): Businesses that are legally required to close will be entitled to local authority grant funding from LRSG (Closed) as follows:
  • Properties with a rateable value of £15,000 or under will receive grants of £667 per two weeks of closure (£1,334 per month).
  • Properties with a rateable value of above £15,000 and below £51,000, grants of £1,000 per two weeks of closure (£2,000 per month).
  • Properties with a rateable value of £51,000 or over will receive grants of £1,500 per two weeks of closure (£3,000 per month).

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.

Areas that are placed into Tier 3 (if and when the tier system returns) are will be provided with additional funding to support their local businesses. These funds are 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 Job Retention Bonus is a £1,000 one-off taxable payment to businesses for each eligible employee that was furloughed and kept continuously employed until 31^st January 2021. Originally you were unable to claim the Job Retention Bonus until 15^th February 2021. However, due to the extension of the CJRS until 31^st March 2021, the Job Retention Bonus will not be paid in February and the government will redeploy a retention incentive at the appropriate time.

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 31^st January 2021.  The schemes were previously due to close to applications on 30^th 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 9^th November and they can make use of this option once.

Details of grants available to businesses as part of the five-level framework have been published (here)

• From 2^nd November, firms that are required by law to close will be eligible for grants every four weeks for as long as the restrictions last. Based on rateable values, awards will be for either £2,000 or £3,000.
• Businesses which can remain open, but are directly constrained by the measures, will be eligible for grants worth £1,400 or £2,100, again based on rateable value.
• This support is in addition to the UK Government’s revised furlough scheme launching on 1st November.
• These grants will be provided regardless of level, to eligible businesses, and paid in fortnightly instalments (subject to discussions with local authorities)

The Welsh Government has announced funding for the third phase of its Economic Resilience Fund (ERF) which also includes a Lockdown Business Fund , which will be delivered by local authorities to eligible businesses. This includes:

• Enhanced Lockdown Non Domestic Rate Grant:
  • Every business eligible for Small Business Rate Relief and occupying a property with a rateable value of £12,000 or less will be eligible for a £1,000 payment.
  • Retail, leisure and hospitality businesses forced to close during the firebreak lockdown period occupying a property with a rateable value between £12,001 and £51,000 will be eligible for a £5,000 payment.
  • A discretionary £2,000 top-up grant will be made available on an application basis for those businesses with a rateable value of £12,000 or less who are forced to close by the firebreak lockdown.
  • A further discretionary £1,000 grant will be made available to businesses on the same basis where they are materially affected by local lockdown measures for 21 days or more prior to the start of the firebreak lockdown period.
• Lockdown Discretionary Grant:
  • Grant amount 1 – a discretionary grant of £1,500 is available to assist businesses that have:
    • Been forced to close (as defined by the regulations) as a result of the national firebreak lockdown
    • OR are able to demonstrate that the national firebreak lockdown will result in at least a 80% reduction in their turnover for that period
  • Grant amount 2 – a discretionary grant of £2,000 is available to assist businesses that have:
    • Been forced to close (as defined by the regulations) as a result of the national firebreak lockdown
    • OR are able to demonstrate that the national firebreak lockdown will result in at least a 80% reduction in their turnover for that period
    • AND have been subject to local restrictions for 3 weeks or more up to the 23rd October and experienced at least a 50% reduction in their turnover for that period.
  • You cannot apply for Grant 1 and Grant 2.
  • You are not eligible for this grant if:
    • You are eligible for, or have received, the Lockdown Non-Domestic Rate Grant from your Local Authority
    • If you have 50 or more employees
    • If the business generated less than 50% of your income, the business must be your main source of income.

Applications will close at 5pm on 20^th November 2020 or when the fund is fully committed, which means that applications will be dealt with on a first come first served basis.

The grant funding will be paid through local authorities but will not be made automatically – the rate payer should check with their local authority. Links to Local Authorities are available here.

The Welsh Government has also allocated additional funding to its Business Development Grant programme which caters to small and medium sized enterprises. Some of this funding requires an element of matching from the business, although for Tourism and Hospitality SME’s (with less than 250 members of staff) and those SME businesses forced to close due to the short Fire Break there will be discretion for grant awards of up to 100%. More information 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.

The Scheme will apply to businesses, subject to eligibility criteria, including:

• Cafes, pubs and restaurants that are required to close or limit their services to a takeaway service instead;
• Hotels, guesthouses and registered bed & breakfasts that have been required to limit the provision of services for residents only.

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:

• Lower rate: £800 for each week that the restrictions apply for:
  • a business that is the sole occupant operating from a property with an NAV of £15,000 or less,
  • a guesthouse or bed & breakfast with a capital value (which means it is valued as a domestic property for rates); or
  • a business that is the occupier of a part of a property which is restricted with any NAV.
• Standard rate: £1,200 for each week that the restrictions apply for:
  • a business that is the sole occupant of a property with an NAV between £15,001 and £51,000.
• Higher rate: £1,600 for each week that restrictions apply for:
  • A business that is the sole occupant of a property with an NAV of £51,001 or more.

The Northern Ireland Executive has also launched a Covid Restrictions Business Support Scheme (details here).  This Scheme will operate in two parts.

• Part A – A business that is required to close or cease trading under the Health Protection (Coronavirus, Restrictions) (No.2) Regulations (Northern Ireland) 2020 but is not eligible for the Local Restrictions Support Scheme.
• Part B – A business which has not been forced to close, but is part of the direct supply chain to a business that is forced to close/cease trading under the Health Protection (Coronavirus, Restrictions) (No.2) Regulations (Northern Ireland) 2020, and as a result it has been severely impacted.
• CRBSS Part A is now open for online applications. Eligible businesses will receive a grant equivalent to £600 for each week the initial Health Protection Regulations are in place. This will be paid in one lump sum.

Further information on CRBSS Part B, including full eligibility criteria, will be released as soon as possible.