More support announced as Omicron impacts on business

Additional support will be available for businesses who have been impacted by the Omicron variant of Covid, the chancellor Rishi Sunak has announced.

Businesses in the hospitality and leisure sectors in England will now be eligible for one-off grants of up to £6,000 per premises.

And more than £100 million discretionary funding will be made available for local authorities to support other businesses

The government will also cover the cost of Statutory Sick Pay for Covid-related absences for small and medium-sized employers.

At what is often their most profitable time of year, many pubs and restaurants have seen cancellations and reduced footfall as people have responded to the rise in cases ahead of Christmas.

Trade body Hospitality UK has reported that many businesses have lost 40-60 per cent of their December trade.

Around 200,000 businesses will be eligible for business grants which will be administered by local authorities and will be available in the coming weeks.

Announcing the moves, Rishi Sunak said: “We recognise that the spread of the Omicron variant means businesses in the hospitality and leisure sectors are facing huge uncertainty, at a crucial time.”

To support other businesses impacted by Omicron – such as those who supply the hospitality and leisure sectors – the government is also giving a more than £100m boost to the Additional Restrictions Grant (ARG) fund for local authorities in England.

They will have discretion to allocate this funding to businesses most in need. The ARG top up will be prioritised for those local authorities that have distributed the most of their existing allocation. This is on top of the £250m of previously allocated funding that remains with local authorities.

As increasing numbers of Covid-19 cases means more workers taking time off work, the government is also reintroducing the Statutory Sick Pay Rebate Scheme (SSPRS).

The SSPRS will help small and medium-sized employers – those with fewer than 250 employees – by reimbursing them for the cost of Statutory Sick Pay for Covid-related absences, for up to two weeks per employee.

Firms are now eligible, and they will be able to make claims retrospectively from mid-January.

The Treasury says the additional measures will reinforce the existing package of business support.

That includes business rates relief meaning that most businesses in the hospitality and leisure sectors will see a 75 per cent reduction in their business rates bill across the entire financial year and a new 50 per cent capped business rates relief next financial year.

There is also a 12.5 per cent reduced rate of VAT for hospitality and tourism to support the cash flow and viability of around 150,000 businesses which will continue until the end of March.

The £1.5bn Covid Additional Relief Fund exists for businesses that have not previously had business rates support.

And businesses will be protected from eviction if they are behind on rent on their premises, thanks to the moratorium that remains in place until March.

There is also access to finance for SMEs through the Recovery Loan Scheme to June.

And Bounce Back Loan repayment flexibility means borrowers having the option to take a six-month repayment holiday, three six-month interest-only periods or extend their loan to 10 years, which almost halves the monthly payment.

HMRC also stands ready to support any business impacted by the coronavirus pandemic through its Time to Pay arrangement.

The chancellor has asked HMRC to offer businesses in the hospitality and leisure sectors in particular the option of a short delay, and payment in instalments, on a case-by-case basis, as part of this.

It has also been announced that £30m further will be made available through the Culture Recovery Fund, enabling more cultural organisations in England to apply for support during the winter.