Businesses and workers have faced considerable impacts since the start of the coronavirus pandemic, and the Welsh and UK governments have developed a range of measures to assist them.
This article outlines the support currently available for businesses from the Welsh and UK governments.
Welsh Government support
The Welsh Government has announced that it will continue to provide 100% business rate relief for retail, leisure and hospitality businesses with rateable values up to £500,000 for the whole of 2021-22.It will also provide leisure and hospitality businesses with a rateable value of over £500,000 with 100% relief.
The Welsh Government has published guidance on how the relief operate, and this states that local authorities will operate the scheme and have discretion around how they maximise take-up and minimise the administrative burden for businesses.
Grants for businesses who pay business rates
These grants will provide support to eligible businesses in the hospitality, retail, tourism and leisure sectors and their supply chains who pay business rates. The following grants are available:
- £2,000 for businesses with a rateable value of up to £12,000 who have seen a 40% decrease in turnover between 13 December 2021 and 13 February 2022 compared to the same period in 2019/20. Businesses may only receive this grant for two properties per local authority.
- £4,000 for businesses with a rateable value of between £12,001 and £51,000 who have seen a 40% decrease in turnover between 13 December 2021 and 13 February 2022 compared to the same period in 2019-20.
- £6,000 for businesses with a rateable value of between £51,001 and £500,000 who have seen a 40% decrease in turnover between 13 December 2021 and 13 February 2022 compared to the same period in 2019-20.
Eligible businesses can register for this funding through their local authority to confirm their details, they do not need to complete an application process. Business Wales has published links to the registration process in all local authorities, and this will remain open until 14 February.
Discretionary Emergency Business Fund
This will provide support to businesses in the hospitality, retail, tourism and leisure sectors and their supply chains who are not eligible for the business rates-linked grants. It will provide the following support:
- Sole traders, freelancers and taxi drivers will be able to apply for a £1,000 grant if they have seen a reduction of at least 40% in turnover in December 2021 and January 2022 compared to the same period in 2019-20. Freelancers in the creative sectors will also be eligible for this funding.
- Businesses that employ staff in addition to the owner will be able to apply for a £2,000 grant if they have seen a reduction of at least 40% in turnover in December 2021 and January 2022 compared to the same period in 2019-20.
Further information is available in guidance published by the Welsh Government. All local authorities will have opened this fund for applications by close of play on 21 January, and the fund will be open for applications for two weeks after opening in each local authority. Business Wales has published a list of links to the application process for each local authority.
ERF Business Grant
This element of the funding is targeted at businesses in the hospitality, leisure and attraction sectors and their supply chains who have been materially impacted by a greater than 50% reduction of turnover between 13th December 2021 and 14th February 2022. The following support will be provided to eligible businesses:
- Businesses legally required to close will be eligible for grants of between £5,000 and £25,000 depending on how many staff they employ.
- Event spaces and attractions that are open but experiencing reduced turnover will be eligible for grants of between £3,500 and £20,000 depending on how many staff they employ.
- Other businesses within the eligible sectors that are open but experiencing reduced turnover will be eligible for grants of between £2,500 and £15,000 depending on how many staff they employ.
The grant is open for applications until 4pm on 1 February. Businesses should complete the eligibility checker on the Business Wales website, and if they meet the criteria they can apply after completing it. The Welsh Government has also published guidance and Frequently Asked Questions.
The Welsh Government is providing 100% business rate relief for retail, leisure and hospitality businesses with rateable values up to £500,000 for the whole of 2021-22. It is also providing leisure and hospitality businesses with a rateable value of over £500,000 with 100% relief during 2021-22.
The Welsh Government has published guidance on how the relief operates during 2021-22, and this states that local authorities will operate the scheme and have discretion around how they maximise take-up and minimise the administrative burden for businesses.
In 2022-23, businesses in the retail, hospitality and tourism sectors will receive 50% business rate relief up to a maximum of £110,000 relief per business. Further details around eligibility criteria will be published on the Business Wales website.
The Barriers to Start Up Grant aims to enable economically inactive, unemployed individuals and young people not in education, employment or training to start their own business. It will provide grants of up to £1,000 to help individuals overcome barriers to starting a business, with priority given to supporting those furthest away from the labour market. The grant is part of a package of support including one-to-one advice and webinars to build confidence in business practices and develop plans for starting a business.
The Welsh Government welcomes applications from people with a work-limiting health condition or disability; people from ethnic minority communities; women; young people aged 18-24 who are not in education, employment or training; and recent college or university leavers who are contracted to work less than 20 hours per week.
The grant is open until 31 March 2022, and applicants will need to download and complete an Expression of Interest from the Business Wales website before returning it to BarriersSUG@BusinessWales.org.
The Welsh Government has announced that commercial tenants who cannot pay their rent will be protected from eviction until 25 March 2022. While commercial tenants will still be liable for the rent, the measures introduced will mean no business will automatically forfeit their lease and be forced out of their premises if they miss a payment up until 25 March 2022.
The Welsh Government has launched a number of incentives to support employers to recruit apprentices. These apply from 1 August 2020 until 28 February 2022, and include:
- £4,000 for each new apprentice aged under 25 recruited, where the employment contract is for at least 30 hours per week;
- £2,000 for each new apprentice aged under 25 recruited, where the employment contract is for less than 30 hours per week;
- £2,000 for each new apprentice aged 25 and over recruited, where the employment contract is for at least 30 hours per week; and
- £1,000 for each new apprentice aged 25 and over recruited, where the employment contract is for less than 30 hours per week
These incentives apply to apprenticeships delivered at levels 2-5, and payments will be limited to a maximum of 10 apprentices per employer.
The apprentice must continue to follow the same Apprenticeship Framework Pathway, and the incentives apply to apprenticeships delivered at levels 2-5.
In addition to these payments, businesses who employ a disabled person as an apprentice can claim an extra £1,500 for each new apprentice recruited. These payments apply to apprentices of all ages, and are in addition to all of the incentives for apprentices aged 16-24 and 25+. These incentives also apply to apprenticeships delivered at Levels 2-5.
The Welsh Government has also launched an Apprenticeship Vacancy Service, where employers can advertise any future apprenticeship opportunities.
The Welsh Government is piloting the Town Centre Entrepreneurship Fund in Bangor, Colwyn Bay, Rhyl and Wrexham to support entrepreneurs and businesses who are looking to start and grow a business. New businesses and micro-businesses who have been trading for less than two years may be eligible for this funding.
There are two elements of support available, grants and loans:
- Grants of between £2,500 and £10,000 are available through Business Wales to support entrepreneurs and businesses with revenue costs associated with starting up or relocating to a town centre. Businesses need to submit an expression of interest form by 20 June 2022. Business Wales has published details of eligibility criteria and guidance notes on the fund.
- The Development Bank of Wales is providing start-up loans of between £1,000 and £50,000. These can be used as match funding for the grant outlined above. Repayment terms are between one and ten years, and if a grant is required then a business must apply to Business Wales before getting in touch with the Development Bank of Wales.
UK Government support
The Recovery Loan Scheme was introduced from 6 April 2021, and will run until 30 June 2022, It replaced Bounce Back Loans, the Coronavirus Business Interruption Loans Scheme, and the Coronavirus Large Business Interruption Loans Scheme.
From 1 January 2022, the Recovery Loan Scheme provides loans of up to £2 million for small and medium-sized businesses with an annual turnover of £45 million or less, and will guarantee 70% of the finance to the lender. Two types of finance are available:
- Term loans and overdrafts of between £25,001 and £2 million per business are available. Overdrafts are available for up to 3 years, while term loans are available for up to 6 years.
- Invoice finance and asset finance of between £1,000 and £2 million per business are available. Invoice finance is available for up to 3 years, while asset finance is available for up to 6 years.
No personal guarantees are taken on facilities up to £250,000, and a borrower’s principal private residence cannot be taken as security.
UK-based businesses that have received support under the existing COVID-19 guaranteed loan schemes are eligible to access finance under this scheme, if they meet all other eligibility criteria. Firms need to show that their business has been impacted by the pandemic, is viable or would be viable were it not for the pandemic, and is not in collective insolvency proceedings.
Further information and a list of accredited lenders are available on the British Business Bank’s website.
From mid-January, the UK Government will reopen its scheme under which SMEs can reclaim Statutory Sick Pay (SSP) paid for sickness absence due to coronavirus. Further guidance will be published by the UK Government.
Other support
- The Corporate Insolvency and Governance Act 2020 temporarily suspends parts of insolvency law through introducing a moratorium of 20 business days for business directors to consider rescue options through filing for or applying to court for a moratorium. The moratorium can be extended for a further 20 business days without creditor consent, or for a longer period with creditor consent, by filing relevant statements with the court. The UK Government’s guidance sets out more details.
- The UK Government has put a 12.5% rate of VAT in place for tourism and hospitality until 31 March 2022, following the end of the temporary 5% rate at the end of September 2021. The UK Government has published general guidance on how the temporary reduction will operate, as well as more detailed documents covering hospitality, holiday accommodation and attractions.
- The Chancellor gave businesses which deferred VAT due in March to June 2020 the option to spread their payments over the financial year 2021-2022.
- The UK Government has given the self-employed and other taxpayers with income tax liabilities of up to £30,000 the option of using HM Revenue and Customs’ Time to Pay facility to agree a plan to pay taxes due in January 2021 over an additional 12 months. This service can be used within 60 days of the payment deadline.
- Businesses who are concerned they may not be able to pay their next tax bill may be eligible to receive support via HM Revenue and Customs’ Time to Pay helpline 0800 024 1222. Arrangements are agreed on a case-by-case basis depending on individual circumstances.
Article by Gareth Thomas, Senedd Research, Welsh Parliament
