Whilst some green shoots of hope have started to appear – including positive progress on covid vaccines and falling reinfection rates in some UK nations and regions – the hospitality industry continues to feel overwhelming pressure from lockdowns and restrictions. We’ve summarised some of the financial packages still available to support you through this tough period
Job Retention Scheme extended until March 2021
Businesses who are unable to operate as usual may be able to take advantage of furlough payments, allowing them to retain staff for whom no role currently exists, or whose role is reduced. The JRS has been extended into March 2021, with payments of up to 80% of wages, to a maximum of £2,500 throughout November, December and January. The latest iteration of the scheme does not extend to NI and pension payments – these must be covered by the employer – and the funding level for the latter months has not yet been announced.
Employees for whom a JRS claim was NOT previously made can be claimed for in the latest version of the scheme, BUT be aware – from November, claims for each month must be made within 14 days of the end of that month, e.g. claims for November furlough payments must be made by 14th December. This is a much smaller claim window than in preceding months.
Local Restrictions Support grants
The latest allocation of grant funding for businesses was announced earlier this month, with specific provision being made for business whose operations were restricted by their sector or location. Funds are allocated via local councils, but a list of criteria for application is available here
If you deferred your VAT payment that was due between 20th March and 30th June 2020, and haven’t yet paid it, your deferred payment is due to be made in full by 31st March 2021. However, a new VAT payment deferral scheme is due to launch early in 2021 that should allow you to make this payment in 11 interest free instalments ending in March 2022, giving a little further breathing space on this debt. You will need to sign up to the scheme as a business, click here for further info.
Bounce Back Loan Scheme
Bounce back loans are government backed loans that are offered to small and medium UK businesses through banks, and are intended to bridge cashflow issues caused by the pandemic.
Loans of up to £50,000 are available dependant on business turnover. The loan term is 6 years, however the first 12 months of interest payments are covered by the government and early repayment is allowed – so in effect, the loan is free to the business if repaid within 12 months. Currently, the BBLS will be available to enter up to 31st January 2021
Because of the nature of these loans and the time limit on access, some businesses have applied for funds as a precautionary measure, keeping them separately from day to day funds, with the intention of paying back before the end of the ‘interest free’ period. As they have proved popular, many financial institutions are only offering them to existing customers, so if you do want to access this loan scheme, it is sensible to approach your own business bank in the first instance.
As with any financial decision, we recommend you talk to your accountant or business adviser before taking advantage of these support schemes, as they will be able to assess the implications and impact on your financial position.
For the full and latest tier 1-3 information, see the Government Local Restrictions breakdown