Are you claiming for everything you need?

By Gary Lloyd

- Last updated on GMT

Money matters: the Government has made financing available to pubs during Covid-19
Money matters: the Government has made financing available to pubs during Covid-19

Related tags Coronavirus grants loans Pubs

The Covid-19 pandemic has thrown the world into a health and economic downward spiral but the UK Government has, and continues, to offer lifelines to the hospitality sector. Here is what’s available to pubs.

Financial assistance for you, your staff and your business is available in a variety of different formats from the Government​.

These are: paying your employees, paying sick pay, paying tax, business rates relief, business support grant funds, support for the self-employed, support for small and medium-sized businesses and support for large businesses.

1)​ When places of work were quickly shut down, it looked like many thousands, if not millions, would lose their jobs across the UK. However, Chancellor of the Exchequer Rishi Sunak announced the Coronavirus Job Retention Scheme (CJRS)​ shortly after pubs were told they must close their doors on Friday 20 March.

The proposal allows employers to ‘furlough’ staff meaning they are effectively redundant but can still receive 80% of their salary, up to a maximum of £2,500 per month. Plus, national insurance and pension contribution payments will be made on top of that too. It can be backdated to 1 March and is available so long as each employer is a UK-based business.

This scheme was initially extended through July but is now being offered until the end of October – however, Sunak has not revealed whether there will be any changes to the CJRS for the months of August, September and October as lockdown is eased and some pubs are expected to be functioning, potentially in a limited capacity, from Saturday 4 July.

On the news of the scheme’s extension, revealed on 12 May​, Federation of Small Businesses national chairman Mike Cherry said: “The job retention scheme is a lifeline that has been hugely beneficial in helping small employers keep their staff in work, and it’s extension is welcome.

“Small employers have told us that part-time furloughing will help them recover from this crisis and it is welcome that new flexibility has been announced.”

Deferring VAT payments

2)​ You can claim for Coronavirus Statutory Sick Pay Rebate Scheme (CSSPRS)​ if members of your retained staff have to take time off work sick. This facility can be backdated to 13 March.

3)​ Any UK employer is also able to defer VAT payments​ that were due to be paid between 20 March and 30 June.

Although businesses are welcome to continue to pay VAT as usual, the Government announced quarterly and monthly VAT returns’ payment for periods ending in February, March and April could be deferred as well.

4)​ Business rates have been a bone of contention for the past few years – with some companies having seen such large increases that they have been forced out of business permanently.

However, in a bid to alleviate some of the pain Covid-19 has wreaked economically, the Government introduced a 12-month business rates holiday​ for hospitality operators.

The announcement was made on 17 March by Sunak, who said at the time: “I am extending the business rates holiday to all businesses irrespective of their rateable value.

“That means every single shop, pub, theatre, music venue, restaurant and any other business in the retail, hospitality or leisure sector will pay no business rates whatsoever for 12 months.”

Additionally, the proposed revaluation of business rates​, which had been brought forward from 2022 to next year has also been deferred because basing rates on takings during the coronavirus pandemic would be an unrealistic point of comparison.

Communities secretary Robert Jenrick said on 6 May: “We have listened to businesses and their concerns about the timing of the 2021 business rates revaluation and have acted to end that uncertainty by postponing the change.

“Now is the time for us to continue to focus on supporting businesses affected by the pandemic, including our unprecedented package of almost £10bn in business rates relief.”

Grants are yours to keep

5)​ Much-needed grants​ are available for businesses too. The Government has funding on offer​ via its Small Business Grants Fund (SBGF) and Retail, Hospitality and Leisure Grant Fund (RHLGF).

The SBGF is available for businesses that are eligible for Small Business Rates Relief (SBRR).

These businesses – pubs with a rateable value up to £15,000 – are entitled to a one-off grant of £10,000, which is issued through a local authority.

Larger businesses won’t generally qualify for SBRR, or the above grant. However, the RHLGF of £25,000 is available to businesses with a rateable value between £15,001 and £51,000, in the retail, hospitality and leisure industries. Again, the grant is managed through local authorities. And remember, grants do not need to be paid back.

British Beer & Pub Association chief executive Emma McClarkin stressed ​on 2 April that these grants were specifically to be used, in part, to pay rents to pubcos rather than rely on bosses to simply cancel such payments.

McClarkin said: “The support from Government in the form of grant payments of £10,000 and £25,000, in addition to the business rates holiday this year, have been warmly welcomed by our sector.

“When announcing this vital support for the UK economy and businesses, Chancellor Rishi Sunak was explicit: ‘Businesses have fixed costs ​​that ​​we will target support at – most of these have two major fixed costs​​:​​ rent and staff’​​.​​

“On the purpose of the grants announced in the support package, he was even clearer that the ‘…​​ grants we have given actually provide a lot of cover to cover those fixed rental payments​​​​.​​

“This means pubs, like other businesses, have the support they need to continue to meet their fixed outgoings – supporting the entire business ecosystem.”

6)​ Self-employed licensees have also been given the green light to apply for the Self-Employment Income Support Scheme​.

The taxable grant will be based on average trading profit over the past three tax years (2016 to 2017, 2017 to 2018 and 2018 to 2019).

This will be worked out by adding together the total trading profits or losses for the past three tax years, which will then be divided by three.

The grant will be 80% of average monthly trading profits, paid out in a single instalment, covering three months and capped at £7,500 altogether.

When the grant allowance is worked out, and if the claim is approved, it will be paid directly into the claimant’s bank account in one instalment within six working days.

There are certain criteria those wishing to claim​ must meet. These include whether you have: traded in the tax year 2018 to 2019 and submitted your self-assessment tax return on or before 23 April 2020 for that year; traded in the tax year 2019 to 2020; intend to continue trading in the tax year 2020 to 2021; and carry on a trade that has been adversely affected by coronavirus.

Loans backed by Government

7)​ There are also a number of loans available to help guide operators through. Here are the options for small and medium-sized businesses.

The Coronavirus Business Interruption Loan Scheme (CBILS)​ offers access to loans and other types of finance up to £5m – and the Government guarantees 80% of the finance to the lender and will pay interest and fees for the first year of repayments.

If your business is based in the UK and has an annual turnover of up to £45m, you can apply. It has been set up by the British Business Bank​.

There is also the Bounce Back Loan Scheme (BBLS)​, a quicker access loan that allows a smaller company to borrow a quarter of their annual turnover, up to a maximum of £50,000.

Trade bodies cautiously welcomed the initiative​ when announced at the end of April, with Wine & Spirit Trade Association chief executive Miles Beale commenting: “This new support whereby small businesses can apply for 100% Government-backed loans amounting to 25% of turnover up to £50,000 is welcome and may support the continued survival of businesses across the wine and spirit industry.

“However, as we have said before, much of the announced support amounts to loans that will need to be paid back.”

8)​ Similar to CBILS, the Coronavirus Large Business Interruption Loan Scheme (CLBILS)​ is one method bigger companies can take advantage of to boost their capital during Covid-19.

The Government-backed loan means firms with a turnover of more than £45m are able to apply for up to £25m of finance, and businesses with a turnover of up to £250m will be able to apply for up to £50m in extra backing.

On announcing the extension to CBILS to help bigger companies, business secretary Alok Sharma said​ coronavirus had struck a heavy blow against businesses of all sizes across the UK. He added: “Expanding this scheme will provide larger firms with the support they need during the pandemic, helping to provide job security to thousands of people and protect our economy.”

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