Support for hospitality industry in Norwich

With Parliament debating the support that the Government has given to the hospitality industry this week, I thought that I would provide an update on my blog. In total, the Government has provided £25 billion in cash grants.

I know that so many businesses across Norwich – every restaurant, hairdresser, beauty salon, gym and more – have been impacted by the pandemic. In the months and years ahead, I will work to support and champion every single good business back to prosperity and I know the Government is working with unparalleled commitment to see us safely through.

There is lots of support available to businesses in the hospitality industry.

Restart Grant

In the 2021 Budget, the Chancellor announced that hospitality businesses in England will benefit from ‘Restart Grants’ of up to £18,000. The grants are also available to non-essential retail (up to £6,000) and accommodation, leisure, personal care and gym businesses (up to £18,000). This gives businesses the cash certainty they need to plan ahead and safely relaunch trading over the coming months.

Closed Business Lockdown Payment

On 5 January 2021, the Chancellor announced further financial support measures for businesses. Any business which has been legally required to close, and which could not operate effectively remotely, was eligible for a one-off grant of up to £9,000.

The grants are calculated on business rates:

• £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

Additional Restriction Support Grant / Local Restriction Support Grant

This comes on top of existing grants. Any business which is required to close is eligible for a grant of up to £3,000 per month. When businesses reopen, they may be eligible for grants of up to £2,100 per month due to potential impact on their trade.

Discretionary Grants

For businesses which do not pay business rates, they may apply for discretionary grants from their Local Authority.

In the Budget, the Chancellor announced a further £425 million discretionary business grant funding for local authorities in England, on top of the £1.6 billion already allocated.

These grants can be distributed to businesses which have fixed-premises costs, for example businesses in shared spaces, regular market traders, and small charity properties. They can also be used to support bed and breakfasts that pay council tax rather than business rates.

Retail, Hospitality and Leisure Grant Fund (RHLGF)

Early on in the pandemic, eligible businesses in the retail, hospitality and leisure industries were also in receipt of the RHLGF, which took the form of another one-off cash grant of up to £25,000.

Small Business Grant Fund (SBGF)

Small businesses in England which pay little or no business rates were entitled to a one-off cash grant of £10,000 from their local council.

Over £11.1 billion was provided in the form of the SBGF and RHLGF.

Loans

The deadline for applications to the Government-backed loan schemes has been extended to the end of March 2021. This includes the Bounce Back Loan Scheme (BBLS), the Coronavirus Business Interruption Loan Scheme (CBILS) and the Coronavirus Large Business Interruption Loan Scheme (CLBILS).

Bounce Back Loan Scheme

Under the BBLS, a business can borrow up to £50,000 and the loan is 100 per cent backed by the Government. If a business previously took out less than the maximum amount, they can top up their amount.

The Pay As You Grow aspect of the scheme enables businesses to extend their repayment terms to ten years. This will reduce average monthly repayments on loans by almost half. UK businesses will also have the option to move temporarily to interest-only payments for periods of up to six months (an option which they can use up to three times), or to pause their repayments entirely for up to six months (an option they can use once and only after having made six payments).

As of 21 February 2021, the BBLS had supported 1,500,466 businesses with loans totalling £45.61 billion.

Coronavirus Business Interruption Loan Scheme

The CBILS helps SMEs access loans and other finance up to £5 million. The loan is 80 per cent guaranteed by the Government.

As with the BBLS, the Government has introduced measures enabling lenders to extend the loan term to ten years. This is at the discretion of the lender.

As of 21 February 2021, the CBILS had supported 92,449 businesses to the tune of £22.03 billion.

Coronavirus Large Business Interruption Loan Scheme (CLBILS)

The CLBILS, which supports large business borrow up to £200 million, also 80 per cent guaranteed, has supported 705 businesses, with £5.20 billion total worth of loans as of 21 February 2021.

Recovery Loan Scheme

In the Budget, the Chancellor announced the Recovery Loan Scheme. From 6 April 2021, the Recovery Loan Scheme will provide lenders with a guarantee of 80 per cent on eligible loans between £25,000 and £10 million to give them confidence in continuing to provide finance to UK businesses.

The scheme will be open to all businesses, including those who have already received support under the existing Covid-19 guaranteed loan schemes.

Further Support

CJRS

Businesses can also benefit from the extension of the Coronavirus Job Retention Scheme (CJRS), which has been extended until the end of September 2021.

In July 2020, 1.4 million jobs in the hospitality sector had been furloughed. The extension of the CJRS will continue to protect jobs over the coming months.

VAT

The temporary reduction in VAT (to 5 per cent from 20 per cent) for hospitality and tourism businesses has been extended until 31 March 2021. In the Budget, the Chancellor confirmed that this will be extended until 30 September 2021. To help businesses manage the transition back to the standard 20 per cent rate, a 12.5 per cent rate will apply for the subsequent six months until 31 March 2022.

Business Rates

For the 2020-2021 tax year, businesses in the retail, hospitality and leisure sectors will have not paid business rates.

The Government will continue to provide eligible retail, hospitality and leisure properties in England with 100 per cent business rates relief from 1 April 2021 to 30 June 2021.

This will be followed by 66 per cent business rates relief for the period from 1 July 2021 to 31 March 2022, capped at £2 million per business for properties that were required to be closed on 5 January 2021, or £105,000 per business for other eligible properties.

Outdoor Hospitality Support

Robert Jenrick MP, Secretary of State for Housing, Communities and Local Government, confirmed that, subject to parliamentary approval, certain temporary measures from the Business and Planning Act 2020 will be extended to help hospitality businesses as they reopen.

For example, the provisions for temporary pavement licences will be extended for a further 12 months to support the recovery of the hospitality industry and high streets.

Every pub in England will also be able to erect a marquee for the whole summer as a one-off to support local pubs. Businesses will be able to use their land more flexibly to provide more outdoor space for diners as restrictions ease, allowing them to serve more customers and recover from the effects of the pandemic.

Evictions Ban

The Government has extended the business eviction ban until the end of June 2021 to support businesses worst affected by the pandemic, such as pubs, bars and restaurants