COVID-19 Government support for hospitality

The Coronavirus Job Retention Scheme, also known as the furlough scheme, has been extended to 30th September 2021. Details about the extension are available here.

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 September 2021.  The level of the grant will remain at 80% until the end of June, at which point the Scheme will begin to taper. The UK Government will continue to pay 80% of employees’ usual wages for the hours not worked, up to a cap of £2,500 per month, up to the end of June 2021.

For periods in July, CJRS grants will cover 70% of employees’ usual wages for the hours not worked, up to a cap of £2,187.50 and employers must pay 10% (up to £312.50). In August and September, this will then reduce to 60% of employees’ usual wages up to a cap of £1,875, with employers paying 20% (up to £625).

Employers will continue to pay employer National Insurance Contributions (NICs) and pension contributions only for the hours the employee does not work.

Businesses 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.

For periods ending on or before 30^th April 2021, you can claim for employees who were employed on 30 October 2020, as long as you have made a PAYE Real Time Information (RTI) submission to HMRC between 20^th March 2020 and 30^th October 2020, notifying a payment of earnings for that employee. You do not need to have previously claimed for an employee before the 30^th October 2020 to claim for periods from 1^st November 2020.

For periods starting on or after 1^st May 2021, you can claim for employees who were employed on 2^nd March 2021, as long as you have made a PAYE Real Time Information (RTI) submission to HMRC between 20^th March 2020 and 2^nd March 2021, notifying a payment of earnings for that employee. You do not need to have previously claimed for an employee before the 2^nd March 2021 to claim for periods from starting on or after 1^st May 2021.

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).

As with the previous CJRS, employers are still able to choose to top up employee wages above the scheme grant (i.e. above 80% of wages) 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 seven consecutive calendar days.

Businesses who have suffered due to COVID restrictions will receive cash grants to support them through the next stage of recovery. Under the scheme, hospitality, accommodation, leisure, personal care and gym businesses in England will get up to £18,000 per premises.

The Restart Grants will replace the Local Restrictions Support Grant (Closed) and Local Restrictions Support Grant (Open), which will both close at the end of March 2021.

The value of the grants will be based on ratebale value.

• For properties with a rateable value of £15,000 or under: £8,000
• For properties with a rateable value between £15,000 and £51,000: £12,000
• For properties with a rateable value of £51,000 or over: £18,000

Local authorities will be responsible for distributing the grants and will receive funding in April. The Government has issued guidance to Local Authorities for the payment of the Restart Grants which start on 1^st April. The full guidance is here.

The application closure date for this scheme is 30^th June 2021 and final payments must be made by 31^st July 2021.

The Closed Businesses Lockdown Payment (CBLP) supports businesses that were required to close due to the national lockdown that began 5^th January 2021. Details are available here.

Eligible businesses may be entitled to a one-off cash grant of up to £9,000 from their local council. Local councils will pay the same businesses that are eligible to receive the Local Restrictions Support Grant (Closed) Addendum for the national lockdown period that began on 5^th January. The deadline to apply for the Closed Businesses Lockdown Payment is 31^st March 2021.

The grant will be based on the rateable value of the property on the first full day of restrictions.

• If your business has a property with a rateable value of £15,000 or less, you may be eligible for a one-off cash grant of £4,000.
• If your business has a property with a rateable value over £15,000 and less than £51,000, you may be eligible for a one-off cash grant of £6,000.

If your business has a property with a rateable value of £51,000 or above, you may be eligible for a one-off cash grant of £9,000.

The third national Lockdown for England started on 5^th January 2021, and a new set of grants have been established – Local Restrictions Support Grants (Closed) Addendum 5 January.

The grants cover two payment periods – 5^th January to 15^th February (42 days) and 16^th February to 31^st March (44 days).

For the 42-day payment made for the period beginning 5^th January 2021, the application closure date is 31^st March 2021 and final payments must be made by 30 April 2021. For the 44-day payment made for the period beginning 16^th February 2021, the application closure date is 31^st May 2021 and final payments must be made by 30^th June 2021.

The following thresholds apply to LRSG (Closed) Addendum: 5 January onwards for the 42-day payment cycle made for the period beginning 5^th January 2021:

• Businesses occupying hereditaments appearing on the local rating list with a rateable value of exactly £15,000 or under will receive a payment of £2,001 per 42-day qualifying restriction period.
• Businesses occupying hereditaments appearing on the local rating list with a rateable value over £15,000 and less than £51,000 will receive a payment of £3,000 per 42-day qualifying restriction period.
• Businesses occupying hereditaments appearing on the local rating list with a rateable value of exactly £51,000 or above will receive £4,500 per 42-day qualifying restriction period.

The following thresholds apply to LRSG (Closed) Addendum: 5^th January onwards for the 44-day payment made for the period beginning 16^th February 2021:

• Businesses occupying hereditaments appearing on the local rating list with a rateable value of exactly £15,000 or under will receive a payment of £2,096 per 44-day qualifying restriction period.
• Businesses occupying hereditaments appearing on the local rating list with a rateable value over £15,000 and less than £51,000 will receive a payment of £3,143 per 44-day qualifying restriction period.
• Businesses occupying hereditaments appearing on the local rating list with a rateable value of exactly £51,000 or above will receive £4,714 per 44-day qualifying restriction period.

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.

These grants were aimed at hospitality and leisure businesses and have been established as LRSG (Open) and LRSG (Closed).

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.

• Businesses that were open in COVID alert level “high” areas (Tier 2) and “very high” (Tier 3): Open businesses which were 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.

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 for LRSG (Open) – the above levels are only an approximate guide.

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.

The application deadline for the LRSG (Closed) and LRSG (Open) schemes is 31^st March 2021.

The latest guidance for Local Authorities for paying these discretionary grants is available here.

Enhanced business support settlements were first provided to areas entering Tier 3 restrictions for the first time from 14^th October 2020. With the 31^st October 2020 announcement that national restrictions would be reintroduced, the scheme was extended and formalised into the Additional Restrictions Grant to support all Local Authorities or Combined Authorities.

Local Authorities received an allocation of the £500 million top-up to the ARG scheme in January 2021, as a result of further national restrictions being imposed. This allocation was based on a per-head calculation. Local Authorities will receive an allocation of the £425 million top-up announced in the 2021 Budget, subject to Local Authorities spending their existing allocations of ARG by 30^th June 2021. The second top-up of £425 million of ARG funding will be allocated to Local Authorities from 1^st April 2021, when conditions of the funding are met. This funding will be allocated based on a per-business calculation.

This latest funding of £425m is to fund businesses not eligible for the Restart Grants, but which are nonetheless experiencing a severe impact on their business due to public health restrictions. The guidance lists a number of business types that Local Authorities should consider for payment of ARG funds (Paragraph 27). Within that list is specific reference to breweries.

Local Authorities can use ARG funding for business support activities. This may primarily take the form of discretionary grants, but Local Authorities could also use this funding for wider business support activities.

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.

The deadline for applying for these grants was 28^th February 2021. Final payments by Local Authorities should be made by 31^st March 2021.

The Government announced an uplift in the claims that can be made under SEISS for November 2020 to January 2021. Details are here.

It 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. 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.

In the March 2021 Budget the Government announced details of the fourth and fifth payments under SEISS (details here). It was confirmed that the fourth SEISS grant will be set at 80% of three months’ average trading profits, paid out in a single instalment, capped at £7,500. The fourth grant will take into account 2019 to 2020 tax returns and will be open to those who became self-employed in tax year 2019 to 2020. The rest of the eligibility criteria remain unchanged.

Eligibility for the scheme will be based on your submitted 2019 to 2020 tax return. This may also affect the amount of the fourth grant which could be higher or lower than previous grants you may have received.

The UK government has also announced that there will be a fifth and final grant covering May to September. You will be able to claim from late July if you are eligible for the fifth grant.

The amount of the fifth grant will be determined by how much your turnover has been reduced in the year April 2020 to April 2021.

The fifth grant will be worth:

• 80% of 3 months’ average trading profits, capped at £7,500, for those with a turnover reduction of 30% or more
• 30% of 3 months’ average trading profits, capped at £2,850, for those with a turnover reduction of less than 30%

Further details will be provided on the fifth grant in due course.

The application deadline for the Bounce Back Loan Scheme, Coronavirus Business Interruption Loan Scheme, and Coronavirus Large Business Interruption Loan Scheme was extended until the 31^st March 2021.  The schemes had been previously due to close to applications on 30^th November 2020.

The Treasury also announced that the 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 could take-up this option from the week commencing 9^th November and they can make use of this option once.

From April 2021, these loans schemes will be replaced by a new scheme, the Recovery Loan Scheme (details here).

The Recovery Loan Scheme ensures businesses of any size can continue to access loans and other kinds of finance up to £10 million per business once the existing COVID-19 loan schemes close, providing support as businesses recover and grow following the disruption of the pandemic and the end of the transition period. Once received, the finance can be used for any legitimate business purpose, including growth and investment.

The government guarantees 80% of the finance to the lender to ensure they continue to have the confidence to lend to businesses.

The scheme launches on 6^th April and is open until 31^st December, subject to review. Loans will be available through a network of accredited lenders, whose names will be made public in due course.

Details of grants available to businesses as part of the Strategic Framework Business Fund have been published (here).This fund will close to new applicants on 22 March 2021.

• The final four-weekly payment will be made on 22 March 2021. As in previous months, this will consist of:
• £2,000 for businesses with a rateable value up to £51,000
• £3,000 for businesses with a rateable value of £51,001 or above
• On 19 April 2021, all SFBF recipients will automatically receive a combined final 2-week supplement and a one-off restart grant to help them reopen.
• Hospitality and leisure businesses in receipt of SFBF will be eligible for grants up to £19,500 based on rateable value:
• for properties with a rateable value of £15,000 or under: £9,000 (£8,000+£1,000)
• for properties with a rateable value between £15,001 and £51,000: £13,000 (£12,000+£1,000)
• for properties with a rateable value of £51,001 or over: £19,500 (£18,000+£1,500)

• Full eligibility criteria is available here.

If you have any questions, please contact ptogneri@beerandpub.com

The First Minister for Wales announced a £150m fund in March that 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, paid by the local authority. 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.

We expect details of a further package of funding for the period after April 1^st to be published shortly. There are currently no firm dates for the reopening of Welsh hospitality, indoors or outdoors. It is planned that self contained accommodation, including pubs with rooms, will be able to open from the 27^th March (provided communal areas remain out of bounds).

Details of the funding available to businesses in Wales 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:

• 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 also operated a Covid Restrictions Business Support Scheme in two parts (details here and here).

• 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 A closed on 16 December 2020.]
• 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. [Part B closed on 16 December 2020.]
• CRBSS Part A paid eligible businesses a grant equivalent to £600 for each week the initial Health Protection Regulations were in place.

In relation to direct financial support from Government and particularly the various business support grants that have been provided through local authorities since March 2020, companies applying must ensure they meet the eligibility requirements under the UK Subsidy Regime and, prior to this, EU State Aid provisions.

This has been complicated by EU Exit and also as the provisions have evolved over the course of the pandemic, with revised ceilings and additional elements added due to the longer timeframe support has been required than originally envisaged.  The details of the current UK subsidy regime are set out in guidance to local authorities in relation to the various grants that can still be applied for (several closed for application at the end of March).

What are the current provisions and thresholds for claiming grants?

The Government introduced the new UK subsidy regime that local authorities must apply in relation to grant applications from the 4^th March 2021. Applications before this point remain subject to the previously agreed EU rules.  The new provisions increased the total eligibility to as much as £10.9 million per economic operator (up from c.€4million). However, as much of the previous provision under the EC temporary framework, a large part of this (£9 million) is conditional on being able to demonstrate a 30% fall in turnover due to the pandemic.

There are three elements in total to this:

• Small Amounts of Financial Assistance Allowance: This allowance is 325,000 Special Drawing Rights, to a single economic actor over any period of three fiscal years, which is the equivalent of £335,000 as at 2 March 2021.  This replaced the previous €200,000 EU de-minimis level
• COVID-19 Business Grant Allowance: This allowance includes any grants previously received under the COVID-19 business grant schemes and any State aid previously received under Section 3.1 of the European Commission’s Temporary Framework across any other UK scheme. This may be combined with the Small Amounts of Financial Assistance Allowance to equal £1,935,000.  There is no requirement here to prove a specific Covid impact on trade.
• COVID-19 Business Grant Special Allowance: Where an applicant has reached its limit under the Small Amounts of Financial Assistance Allowance and COVID-19 Business Grant Allowance, it may be able to access a further allowance of funding under these scheme rules of up to £9,000,000 per single economic actor, provided the following conditions are met: a. The Special Allowance covers only the applicant’s uncovered fixed costs incurred during the period between 1 March 2020 and 31 March 2022, including such costs incurred in any part of that period (‘eligible period’); b. Applicants must demonstrate a decline in turnover during the eligible period of at least 30% compared to the same period in 2019.

Is there is any further information on the evidence Local Authorities will require or further definitions around uncovered fixed costs?

The LA guidance sets out the following additional detail:

• The calculation of losses will be based on audited accounts or official statutory accounts filed at Companies House, or approved accounts submitted to HMRC which includes information on the applicant’s profit and loss.
• ‘Uncovered fixed costs’ means fixed costs not otherwise covered by profit, insurance or other subsidies.
• The grant payment must not exceed 70% of the applicant’s uncovered fixed costs, except for micro and small enterprises (for the purposes of this scheme defined as less than 50 employees and less than £9,000,000 of annual turnover and/or annual balance sheet), where the grant payment must not exceed 90% of the uncovered fixed costs.
• Grant payments under this allowance must not exceed £9,000,000 per single economic actor. This allowance includes any grants previously received in accordance with Section 3.12 of the European Commission’s Temporary Framework; all figures used must be gross, that is, before any deduction of tax or other charge.
• Grants provided under this allowance shall not be cumulated with other subsidies for the same costs.

This is clearly a complex area 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 the same period in 2019.

Of course, It may be a while yet before annual accounts are signed-off and there may be differences in accounting periods.  This provision will therefore need a pragmatic approach to work, so for example we would envisage 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 would be consistent with the EU legislation.

It is though for local authorities to administer. We are therefore urging BEIS and LGA to try and ensure a consistent, timely and pragmatic approach by individual LAs.

Are the UK subsidy threshold regimes cumulative from the start of the pandemic or was there a reset for 2021 grants?

They are cumulative, so the totality of all grants and direct financial support since March 2020 and including the latest restart grants.

Do CBILs and other Government-back loans count as State Aid and therefore towards the subsidy regime thresholds, either in terms of the amounts borrowed or the preferential interest payments?

The initial response from BEIS is that such loans would not count towards these thresholds and we have not seen this specified anywhere, but we await a definitive view from their lawyers.

Are there different rules in devolved nations?

BEIS inform us that the UK subsidy regime would usually apply throughout the UK, but we are aware in Wales for example that one Local Authority has been pointing the Welsh Government guidance that still stipulate the previous EU maximum rate of €800,000 to deny grants to businesses who have already claimed more than this. We are trying to resolve this but not aware of other issues thus far with divergence at national level.

Is there a contact point in the UK subsidy regime team for any further questions?

Yes. subsidycontrol@beis.gov.uk