Dive into the world of PAYE investigations. Uncover the facts, implications, and insights in this informative blog
The COVID-19 global pandemic had a detrimental effect on many businesses, but there were some sectors that were hit particularly hard.
The non-essential retail, accommodation, hospitality, personal care and leisure industries were forced to close with the lockdown and only permitted to re-open with certain restrictions in place.
The Restart Grant was announced in March 2021 to help businesses in these industries re-open in a COVID-secure way.
What is the Restart Grant?
In the Budget statement on 3rd March 2021, Chancellor Rishi Sunak revealed that Restart grants would be available to businesses in certain sectors. The goal of this grant was to support businesses as they re-opened, giving them extra help because certain limitations would still be in place.
The grant is only available to businesses based in England, with the Scottish, Welsh and Northern Ireland governments providing their own schemes.
The government said that the Restart grant would be worth around £5 billion in total to the eligible businesses around the country. It replaced certain other types of government support, such as the Local Restrictions Support Grant. Around 700,000 businesses are estimated to be eligible for the Restart payment.
As a type of COVID support grant, the Restart payments do not need to repaid. However, this grant is included in the business profits and may therefore be subject to tax.
What Businesses Are Eligible for the Restart Grant?
The Restart grant is designed to support certain sectors, businesses that had been forced to close for a prolonged period and who faced more restrictions upon opening up. Restaurants are an example of this; they were initially only permitted to serve food outside and to small groups of people at each table.
The following industries are all included in the Restart government support:
- Non-essential retail
- Accommodation
- Leisure
- Hospitality
- Personal care
The business must also meet the following criteria:
- Based in England
- Trading on 1 April 2021
- Rate-paying
To qualifying as a trading business, you may have been operating online. However, businesses that had furloughed their staff or who were closed but waiting to re-open would also be considered as trading.
In contrast, businesses who had been removed from the Companies House register, or who were insolvent or in administration would not be considered as trading.
You will need to declare that your business has been adversely affected by the COVID-19 pandemic, and have records to document this. You may be asked to prove your eligibility at a later date by either the local authority or HMRC.
What If My Business Offers Different Types of Services?
Some businesses may fall under more than one category, offering both non-essential retail and accommodation, leisure, hospitality or personal care.
Where this is the case, it’s up to you to determine where the majority of your business lies. This will determine the category your business falls within.
To do this, you need to ascertain where 50% or more of your business comes from. The government expects businesses to exercise “reasonable judgement” when determining the primary function of their business.
It’s essential to be clear about which sector makes up the primary function of your business because different amounts of support are available to non-essential retail and the other qualifying industries.
How Much Will I Receive?
The amount you receive under this government support scheme depends on the type of business you have and your rateable value.
Non-essential retail is eligible for a lower amount because re-opening doesn’t involve the same limitations on trade.
A payment of up to £6,000 per premises is available for those in the non-essential retail sector, and up to £18,000 for the other eligible sectors.
The payments for the non-essential retail sector are based on the following rateable values as of 1 April 2021:
- £15,000 or less: £2,667
- Between £15,000 and £51,000: £4000
- More than £51,000: £6,000
The payments for leisure, accommodation, personal care and hospitality are based on the following rateable values as of 1 April 2021:
- £15,000 or under: £8,000
- Between £15,000 and £51,000: £12,000
- More than £51,000: £18,000
These amounts are payable as a single, one-off payment.
Are There Any Restrictions on Financial Support?
The Restart scheme is part of subsidy allowances which means it forms part of your personal allowance. Under all the qualifying schemes, you must not exceed the total permitted amount of support.
The subsidies which count towards your personal allowance include:
- COVID-19 Business Grant Allowance - a maximum payment of £1,600,000
- Small Amounts of Financial Assistance Allowance - up to £335,000 over three years
- COVID-19 Business Grant Special Allowance - if the maximum amount of support has already been reached under the to previous grants, this scheme can provide further funding up to £9,000,000 if certain conditions are fulfilled.
Under all of the above schemes, and including the Restart grant, the maximum you can claim is £10,935,000.
How Do I Apply?
The Restart grant is being administered by local authorities rather than a centralised source. Therefore, if you believe you are eligible, you will find all the information on your local authority’s website, including information on how to apply. Most qualifying businesses won’t need to take any action, as they will be automatically identified by their local authority.
However, as the lockdown conditions have lifted and businesses are no longer so heavily restricted, the Restart grant is no longer accepting new applications. Many forms of government support were time-limited, including the Restart grant.
The scheme has now closed to new applications. To receive the grant, you should have submitted your application by 30 June 2021. The government says that eligible businesses should have received their payment by 31 July 2021.
If you applied for the Restart grant or you were told by your local authority that you were eligible and would be receiving a payment, you should have received it by now. If you haven’t, you should get in touch with your local authority.
If you have any questions about the issues raised in this article, we at Key Business Consultants can help. Get in touch with us today or call us directly on 020 3728 2848.
