New restrictions, new relief
With England now into its third lockdown, Business Control’s Richard Starkey considers the impact on businesses – and the grants available.
With many of the same restrictions in place, it would be easy to say that this lockdown feels the same as what we went through in March, but the reality is that it’s quite different. Certainly, it’s very, very difficult for many businesses, but at Business Control we’ve not had nearly as many fraught calls and emails from our clients, and it seems as though there’s a sense of resignation in the air. We’ve been here before, we can just about manage working from home, and we can tough things out until the coast is clear.
Or rather, most of us can.
Retail relief
It’s a different story for those in the retail, hospitality and leisure sectors, who’ll be reeling from the forced closures. And thankfully, the Chancellor has announced a fund of £4.6 billion in new lockdown grants to support businesses and protect jobs. Some news outlets have reported that businesses can claim £9,000 grants and while that’s true, it’s not the whole story. The payments rise to reflect the rateable value of the property up to £9,000. Here’s the breakdown:
- £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
Any business which is legally required to close, and which cannot operate effectively remotely, is eligible for a grant.
Certainly, these grants won’t be able to save some businesses that are struggling at the moment, but along with the 80% furlough payments (which are continuing until April) they could be enough to keep the ‘wolf from the door’ – depending on the fixed costs you have to pay while the doors are closed.
Furlough payment
It’ll have passed many by, but it’s worth noting that the £1000 relief, which the government was due to pay to companies for every member of staff that had been furloughed has been WITHDRAWN. This is because the furlough scheme has been extended until the end of March. Will it be reinstated? Watch this space.
In Bristol and Bath, you can see that some hospitality businesses have been forced to throw in the towel, and that’s very sad to see. I also feel sorry for the arts and entertainment sector, which has been extremely hard hit – perhaps more so than hospitality – and we’ve witnessed its effects first hand here at Business Control. Some of our clients are self employed within these sectors and finding it impossible to find work; one went freelance this time last year and therefore has no records to show HMRC and is thus ineligible for relief, aside from Tax Credits.
Looking ahead
But let’s not dwell on the negatives. There is light at the end of the tunnel in the form of the vaccine and, while January can be a gloomy month at the best of times, companies are still doing business and turning a profit. We now also have clarity on Brexit, which will be of real help to the importers and exporters we work with. The deal that was struck for zero duty and zero tariffs will be a godsend, although there will be more paperwork to contend with and this administration will result in slightly higher prices for all, I expect.
In a previous blog I was talking about the importance of planning and forecasting and I’m sure that those businesses that have kept a close eye on their financial situation will be better prepared for the future. The days and the weeks will soon fly by and hopefully those vaccines will start to have a dramatic impact on all our lives.
In the meantime, keep your head down, keep trading and hang in there.
Don’t forget to check out the rest of our Accounting for COVID-19 blogs here, and please check back periodically to get the very latest insight and information from the Business Control team.
