25 March 2020

Key questions and support for hospitality businesses during the Covid-19 outbreak

Do I have to pay my Business Rates?

The Government has introduced support for retail, hospitality and leisure businesses that pay business rates with a business rates holiday for the 2020 to 2021 tax year. Businesses that received the retail discount in the 2019 to 2020 tax year will be rebilled by their local authority as soon as possible.

You are eligible for the business rates holiday if:

  • your business is based in England
  • your business is in the retail, hospitality and/or leisure sector
  • properties are wholly or mainly being used: as shops, restaurants, cafes, drinking establishments, cinemas and live music venues or for assembly and leisure as hotels, guest & boarding premises and self-catering accommodation.

How to access the scheme

There is no action for you to take. This will apply to your next council tax bill in April 2020. However, local authorities may have to reissue your bill automatically to exclude the business rate charge. They will do this as soon as possible.

You can estimate the business rate charge you will no longer have to pay this year using the business rates calculator.

What cash grants are available for retail, hospitality and leisure businesses?

The Retail and Hospitality Grant Scheme provides businesses in the retail, hospitality and leisure sectors with a cash grant of up to £25,000 per property.

Businesses with a rateable value of £15,000 and under will receive a grant of £10,000.
Businesses with a rateable value of between £15,000 and £51,000 will receive a grant of £25,000.

You are eligible for the grant if:

  • your business is based in England
  • your business is in the retail, hospitality and/or leisure sector
  • Properties are wholly or mainly being used: as shops, restaurants, cafes, drinking establishments, cinemas and live music venues for assembly and leisure as hotels, guest and boarding premises and self-catering accommodation.

You do not need to do anything. Your local authority will write to you if you are eligible for this grant.

Any enquiries on eligibility for, or provision of, the reliefs and grants should be directed to the relevant local authority.

Support for all UK businesses through the Coronavirus Job Retention Scheme

Under the Coronavirus Job Retention Scheme, all UK employers will be able to access support to continue paying part of their employees’ salary for those employees that would otherwise have been laid off during this crisis. HMRC will reimburse 80% of furloughed workers wage costs, up to a cap of £2,500 per month.

How to access the scheme

You will need to:

  • designate affected employees as ‘furloughed workers,’ and notify your employees of this change. Remember that changing the status of employees remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation
  • submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal that is being set up.

Existing HMRC systems are not set up to facilitate payments to employers. HMRC are working urgently to set up a system for reimbursement. Based on current thinking, it seems likely that no reimbursements will be made for at least six weeks, possibly more. This means you will need to fund payments out of cash flow during this time.

Is there any other funding available for UK businesses for short term cash flow support?

Finally, if your business needs short term cash flow support, you may be eligible for a Coronavirus Business Interruption Loan. For more information on this, read Tackling cash flow problems until Government Covid-19 support arrives.

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About the Author
Heath Thomas, Partner, Head of Thames Valley Office, Licensing and Regulatory

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