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Sunak unveils lockdown grants worth up to £9,000

Chancellor Rishi Sunak has announced today a one-off grant worth up to £9,000 for businesses in retail, hospitality and leisure as part of a £4.6bn support package to help business through the latest national lockdown. 

5th Jan 2021
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The Chancellor Rishi Sunak attends a virtual meeting
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This morning, Sunak unveiled fresh support for struggling UK sectors hit hardest by the Covid restrictions that will have to close due to the new national lockdown.  

Businesses in retail, hospitality and leisure will be able to receive one-off grants up to £9,000 per business premises.

The announcement comes the morning after the prime minister imposed tough new lockdown measures which are likely to last until at least February half term.  

The one-off grant will be open to businesses in hospitality, retail and leisure forced to close their doors and the amount will be judged on the rateable value of the premises. 

  • £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

In addition, Sunak also rolled out a further £594m for local authorities and devolved administrations. These funds will support businesses not eligible for the one-off grant and those interested are encouraged to apply to their local authorities.  

Sunak recognised that the new strain of the virus presents a “huge challenge” and requires “swift action”, which is why they’re announcing “a further cash injection to support businesses and jobs until Spring”. 

“This will help businesses to get through the months ahead – and crucially it will help sustain jobs, so workers can be ready to return when they are able to reopen.”

Additional support

Today’s £4.6bn cash injection comes in addition to the already existing grants worth up to £3,000, the extension to the furlough scheme until April and the business lending schemes.

The last line of the government press release also highlighted an extension of the Self Employment Income Support Scheme, but no further details were given on that nor any support for those that don't qualify for SEISS.

Devolved administrations will have their own pot to deliver grants and support, with Scotland receiving £275m and the Welsh government getting £227m.

This package of support will tide businesses over until 3 March when Sunak will “take stock of our wider support, and set out the next stage in our economic response”.

“The next few weeks are going to be difficult but we are vaccinating more and more people every day. So that’s why we are re-doubling our efforts to protect businesses, jobs and incomes,” said Sunak 

But questions have already been raised on whether this support will be enough for Covid-hit businesses that were already suffering before the announcement of the new lockdown. MP Mel Stride, the chair of the Treasury committee, said the additional support from the Chancellor will be welcomed by struggling businesses but the committee will be “scrutinising it very carefully”. He added: “The Chancellor must not forget those who have fallen through the gaps around previous support packages.” 

Lockdown restrictions

On Monday evening, Boris Johnson ordered the people in England to stay at home, as the reported cases of coronavirus spiralled to a record 58,784 cases on Monday. The tough new rules in England mirror those in Scotland, where earlier on Monday first minister Nichola Sturgeon issued similar stay at home orders.  

HMRC’s decision to reject calls to extend the self assessment deadline will be a further blow for those balancing Covid support and meeting the 31 January.

The AccountingWEB readers up against the looming 31 January self assessment deadline are already questioning whether their situation would mean they’re considered key workers and able to work from their offices

“I think we are as we are providing essential services and one with an immediate deadline,” said Kaylee100.

JD agreed: “I for one definitely do not want clients delivering records to my home and will be taking the safest option of continue going to the office.”

The founder of the Corporate Finance Network, Kirsty Mcgregor backed this cause on Twitter. 

Is this support enough for your clients? Will any of your clients miss out during this new national lockdown?

Replies (20)

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neand
By neanderthal
05th Jan 2021 11:25

accountants never loved or appreciated - always tretaed as enemy of the state but if it wasnt for them their system would have collapsed in no time.

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Replying to neanderthal:
By Nick Graves
06th Jan 2021 10:54

neanderthal wrote:

accountants never loved or appreciated - always tretaed as enemy of the state but if it wasn't for them their system would have collapsed in no time.

Over time, I've become increasingly in agreement with Murray Rothbard, so I would be honoured by that epithet!

Might go buy the T-shirt.

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By norstar
05th Jan 2021 11:45

After that little announcement yesterday, we're now being inundated with worried clients asking about support, who is allowed to open etc.

If we were struggling to meet the SA deadline before, we are now! Still no extension to SA filing however. Up ladder Jack. Get on with it.

In the meantime, clients fed up with trying to contact a non-responsive HMRC call us instead.

People who don't understand the schemes on offer or the requirements ask us for help.

Local authorities ask for financials to issue grants so we're asked to prepare this in the 3 days the council gives the client to do it for the December quarter.

We process CJRS claims, file VAT and tax returns to keep the country's coffers topped up.

All the while we try and do this whilst fielding hundreds of enquiries from clients who still haven't had a refund or a loss claim processed by HMRC - nine months after the submission. Appeals and complaints are ignored. Letters to HMRC unopened...

I think HMRC and the Government would do well to acknowledge the work we do in supporting them. If we're not essential, they should try and see how they get on without us acting as a filter and a conduit to their nonsense. They're not fit for purpose right now and that's even with our help propping them up.

Petition for extending the SA deadline is here by the way: https://petition.parliament.uk/petitions/558528

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By SXGuy
05th Jan 2021 19:14

"In addition, Sunak also rolled out a further £594m for local authorities and devolved administrations. These funds will support businesses not eligible for the one-off grant and those interested are encouraged to apply to their local authorities. "

And who qualifies for this? Because the last lot of local authority payments for tier restrictions were given and were told to prioritise hospitality, retail and leasure, is this new injection still for just those?

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Replying to SXGuy:
By 0098087
06th Jan 2021 09:52

Just as shambolic as the tech grant using the last of the EU money. Didn't even know when that was available. Worked our arses off since March and had 1 day off before we took time over Christmas. Clients definitely don't appreciate us. Picked up one new one in August and he's upset with the fees. Says payroll is just pressing a button. Total [***].

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Replying to 0098087:
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By SXGuy
06th Jan 2021 09:58

I wouldn't take a client on that said that to me. I'd see red and tell them to go do it thereselves.

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Replying to SXGuy:
By 0098087
06th Jan 2021 10:06

Told him to go to previous accountant but wouldn't go..

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Replying to 0098087:
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By SXGuy
06th Jan 2021 10:20

Someone like that will most likely always query your fee based on it only being "tapping some buttons"

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Replying to SXGuy:
By 0098087
06th Jan 2021 10:25

Actually he's paid now without saying anything. Am wondering if we'll get a letter from another firm

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Replying to 0098087:
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By Ian McTernan CTA
06th Jan 2021 13:20

You took time off over Xmas? Best time of year to work. Have to admit having Xmas day off but worked the rest of it including doing some draft accounts for 31/12/20 and cash flow forecasts for a client on 1st January.
Now in a good position for January. And looking forward to three rounds of golf a week when it warms up:-)
Clients trained to not call about new announcements as they know I will email them when details are available.
As for the client's comment about payroll, either give him a quick list of all the considerations that have to be made every month or invite him to come sit with the person doing the payroll and have them explain each step to the client- they will never complain about a payroll fee ever again.

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Replying to Ian McTernan CTA:
By 0098087
06th Jan 2021 13:35

We had to take time off as we had only had 1 day off since last January!

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Replying to SXGuy:
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By Hugo Fair
06th Jan 2021 10:07

Are you sure about the rules for the "last lot of local authority payments for tier restrictions"?

I ask because the first lot (during the original lockdown) were given to LAs as two separate funds to disburse ... one, as you say, solely for businesses in those 3 sectors (and with premises on which they paid Rates), the other for businesses who don't pay Rates (irrespective of the sector).
The second fund was 'discretionary' - so each LA could make up its own rules in determining both eligibility criteria and the sums available (until the fund dried up).

No idea what happened during the 2nd iteration (during tier restrictions), but this is another lockdown so I'm expecting similar rules for 'discretionary' LA grants. Of course, we'll only find out the details when each relevant LA publishes them on their website!

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Replying to Hugo Fair:
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By SXGuy
06th Jan 2021 10:18

Sorry I probably didn't explain properly. I meant the 2nd discretionary fund. Most LAs including mine took that to mean only pay hospitality, leasure and retail.

So I wondered if this new injection was also discretionary on the same basis.

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By colinstewart
06th Jan 2021 09:56

It is a good job our professional bodies are on to this and representing us at the highest levels!

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Replying to colinstewart:
neand
By neanderthal
06th Jan 2021 12:44

Professional bodies are looking after their own interests, not the members' who pay them.
Govnt is laughing at having 500 different associations and fighting between them instead of representing their mbers interests.

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Replying to colinstewart:
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By BryanS1958
06th Jan 2021 12:47

Sadly the professional bodies seem to be more interested in spending time and members' income jumping on media bandwagons by signing up to a Black Talent Charter (why not an 'Equal Rights for All Talent Charter, if any such charter is deemed necessary?).

They have done nothing to ensure that contractor and directors of SME businesses are placed on an equal footing with employees and big businesses. Many of my clients took dividends and small salaries and are getting minimal furlough payments. They have paid substantial tax on dividends and contractors have minimal rights compared with 'proper' employees, but are getting no support from the government. In the meantime the jobs are going abroad, or they are being forced to accept jobs under PAYE at much lower daily rates and still minimal employee rights.

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Replying to BryanS1958:
By turchyna582
06th Jan 2021 13:53

Absolutely no sympathy with 'small company directors' or 'contractors' or 'freelance' etc; who have all chosen to go their particular 'route' - simply to enhance their 'net of tax income stream' irrespective of how you might describe that 'income stream'.
If they choose (their choice, not HMRC's), to pay themselves minimum PAYE salary etc., then they should stop carping on about the potential future impact of their choices.
If they want equal support for furlough as bone-fide employees whose only income is PAYE, then they should have 'set themselves up' as such.
As for the Contractors and Freelancers; they get permanent HMRC support, via the more generous expense deductions and flexibility permitted in calculating their taxable income - such flexibility etc being denied to bone fide PAYE employees.

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Replying to turchyna582:
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By norstar
07th Jan 2021 14:09

I absolutely loathe this type of view. It's misguided, bitter sounding and frankly, makes me angry.

For one thing, many people haven't "chosen to go their particular route". When Gordon Brown set the wheels in motion for CT exemptions and shifted IR35 onto the little guy, the big companies forced people to work through this contracting model to avoid taking responsibility for NI and employment rights. So don't now chastise the "little guy" for having to work with no protection thanks to a distorted market.

Then there's the question of "they pay themselves minimal salary". If you are working through a limited company - not necessarily a contracting company - and you are faced with clear, transparent rules that say you can pay yourself a high salary and low dividend income, and you'll pay £10,000 in tax, or you can pay a low salary and a high dividend route and it'll be £6,000 in tax, would you honestly have said "yes! I'll pay the £10k! I have no idea why I want to have the higher salary but I will!". At the time, payment of a higher salary carried almost no tangible benefits. As a director you couldn't make yourself redundant, your state pension doesn't go up and who would have predicted a salary based furlough scheme in a pandemic.

You're talking about hindsight. No one who had a low salary and took higher dividends deserves to be neglected and cut loose by the government just because they made a sensible decision based on the tax rules prevailing at the time where to do otherwise would never be logical - merely masochistic.

Don't pretend you would do otherwise.

Your comments also smack of ignorance generally. "As for the Contractors and Freelancers; they get permanent HMRC support, via the more generous expense deductions and flexibility permitted in calculating their taxable income - such flexibility etc being denied to bone fide PAYE employees". That's not the case since the Flat rate scheme was curtailed and the deductions for travel etc are more stringent. They also have to self insure and pay their own fees.

Educate yourself and knock the chip off your shoulder.

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Replying to norstar:
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By BryanS1958
07th Jan 2021 15:14

I couldn't have said it better myself:-)

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Replying to norstar:
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By SXGuy
07th Jan 2021 15:26

Totally agree!

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