£4.6bn in New Lockdown Grants to Support Businesses Through the Latest National Lockdown

09/01/2021 - 5 minutes read

Chancellor Rishi Sunak has announced £4.6 billion in new lockdown grants for businesses in retail, hospitality and leisure to help businesses through the latest national lockdown.

New Lockdown Grants

£4.6bn in New Lockdown Grants to Support Businesses Through the Latest National Lockdown

Further information on new lockdown grants which will available as a one-off top-up grant in addition to the billions of existing business support, including grants worth up to £3,000 for closed businesses, and up to £2,100 per month for impacted businesses once they reopen.

In details:

  • – £4,000 of new lockdown grants for businesses with a rateable value of £15,000 or under
  • – £6,000 of new lockdown grants for businesses with a rateable value between £15,000 and £51,000
  • – £9,000 of new lockdown grants for businesses with a rateable value of over £51,000
  • – any business which is legally required to close, and which cannot operate effectively remotely, is eligible for new lockdown grants
  • – business support is a devolved policy and therefore the responsibility of the devolved administrations, which will receive additional funding as a result of these announcements in the usual manner.
  • – the Scottish Government will receive £375 million for new lockdown grants
  • – the Welsh Government will receive £227 million for new lockdown grants
  • – the Northern Ireland Executive will receive £127 million for new lockdown grants
  • – this will contribute to the funding which has already been guaranteed by the UK Government, to continue to provide the devolved administrations with the certainty they need to plan for their COVID-19 response in the months ahead
  • – small businesses in the devolved administrations should also be able to benefit from other UK-wide measures in the government’s unprecedented package of support for business, including the various business lending schemes (where the repayment terms were made easier as part of the Winter Economy Plan), and the extension of the Self Employment Income Support Scheme

A further £594 million is also being made available for Local Authorities and the Devolved Administrations to support other businesses not eligible for the new lockdown grants listed above. Businesses should apply to their Local Authorities.

In addition, the government announced that the furlough scheme will be extended alongside loan schemes until 30 April 2021, with the government continuing to contribute 80% towards wages.

2021’s Budget has also been confirmed for 3rd March and will “set out the next phase of the plan to tackle the virus and protect jobs”.

The announcement also alludes to a 45-day redundancy notice period for business “with Budget setting out the next phase of support more than 45 days before the new end date of the scheme”.

The announcements come as ministers scramble to ease pandemic and Brexit strains as businesses face continued tier restrictions until spring 2021.

“We know the premium businesses place on certainty, so it is right that we enable businesses to plan ahead regardless of the path the virus takes, which is why we’re providing certainty and clarity by extending this support, as well as implementing our Plan for Jobs,” commented Sunak.

The UK government has injected a current total £68bn into the economy via business loan schemes, with £43.5bn going towards the Bounce Back Loan Scheme (BBLS) alone.

In addition to the new lockdown grants, the bounce back loan scheme has been extended until 31st March 2021.

The scheme helps small and medium-sized businesses to borrow between £2,000 and up to 25% of their turnover. The maximum loan available is £50,000.

The government guarantees 100% of the loan and there won’t be any fees or interest to pay for the first 12 months. After 12 months the interest rate will be 2.5% a year.

The scheme is open to applications until 31 March 2021.

If you already have a Bounce Back Loan but borrowed less than you were entitled to, you can top up your existing loan to your maximum amount. You must request the top-up by 31 March 2021.

Contact MCL Accountants on 01702 593 029 to optimise your tax position or if you need any assistance with your Job Retention Scheme claims or company accounts.

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