A new lifeline for struggling businesses
Following the latest announcement that lockdown will be extended, the UK Chancellor has unveiled a new lifeline for struggling businesses, which will provide some light relief to those that have either had to close down or have been affected by the tighter Covid restrictions.
The previous support offered to businesses including the £3,000 grant to closed businesses and up to £2,100 per month for impacted businesses once they reopen are still available. However, in light of the lockdown extension, businesses now have a few additional options that they can take advantage of:
Furlough
If employees are unable to work due to the lockdown measures, then businesses have the option of putting them on furlough as the scheme has been extended until the end of April 2021.
The Government will pay 80% of the wages of those eligible under the scheme, which many employers are now revisiting in light of the latest lockdown. The scheme not only covers full-time employees, but also those who are part-time, agency, or on flexible or zero hours contracts. There is no requirement that employees must have previously been furloughed, although they must have been on the payroll before 30 October 2020.
Whilst the scheme remains available, there is no requirement for an employer to furlough its employees.
A detailed explanation of the furlough scheme can be found in our previous articles.
Retail, Hospitality and Leisure Grant
The Chancellor also announced that he will be implementing a £4bn grant to support the retail, hospitality and leisure industry. The grant allows any business in this sector who is legally required to close and unable to operate remotely to the following:
– £4,000 for businesses with a rateable value of £15,000 or under – £6,000 for businesses with a rateable value between £15,000 and £51,000 – £9,000 for businesses with a rateable value of over £51,000
The grant is provided on a per property basis and is expected to benefit over 600,000 business properties.
Local Authority Grants
The Chancellor has also provided support for businesses who fall outside of the retail, hospitality and leisure industry as they have ability to claim for a separate grant from their Local Authority.
£594m will be made available to Local Authorities who will be able to distribute funds to struggling businesses as necessary. In order for a business to take advantage of the one-off payment, they should apply to their Local Authority directly.
If you require assistance with furlough, redundancies, reduction to an employee’s pay or advice on any of the above, then please call the team on 01752 663295.