Ercan Demiralay FCCA, details the latest grants being provided to businesses as the UK enters a third national lockdown.
With the country locking down again, Chancellor Rishi Sunak has announced a new support package totalling £4.6bn for struggling businesses.
The top up grants are aimed at the retail, hospitality, and leisure trades with organisations able to claim up to £9,000.
Another discretionary fund of £590m is also being allocated to Councils, they can then distribute the funds to businesses that don't qualify for the grants but are still impacted by the lockdown restrictions.
How the grant will work
The size of the grant you can access depends on the rateable value of your business. This means you can obtain £4,000 if your business has a rateable value of £15,000 or under. This then increases to £6,000 if your businesses has a rateable value £15,000 - £51,000. Finally you can claim £9,000 if your business has a rateable value of more than £51,000.
It is estimated that about 600,000 businesses will be eligible. The hope is this will keep these organisations going until the Chancellor delivers the Budget on Wednesday 3 March 2021. It's expected that Rishi Sunak will use that date to then announce more potential support measures, if they're needed.
The grant comes with a longer term warning given the government's own deteriorating financial position. The UK has spent around £300bn so far supporting the economy through the COVID-19 pandemic. Public sector borrowing could hit £400bn this year and UK national debt now stands at £2trn.
The longer the pandemic requires lockdown restrictions, so the more support and spending the government are likely to have to undertake. This in turn will likely worsen the UK's debt position. At some stage the Chancellor's attention will have to focus on how to sort out the nation's finances.
Speculation was rife at the end of 2020 that Rishi Sunak was considering tax rises, in particular reforming Capital Gains Tax, following recommendations by the Office of Tax Simplification. Owner managers and individuals would therefore do well to obtain all support available now but with an eye on a potentially greater tax burden being incurred in the future.
The content of this post was created on 05/01/2021 and updated on 13/01/2021. Please be aware that information provided by this blog is subject to regular legal and regulatory change. We recommend that you do not take any information held within our website or guides (eBooks) as a definitive guide to the law on the relevant matter being discussed. We suggest your course of action should be to seek legal or professional advice where necessary rather than relying on the content supplied by the author(s) of this blog.