Chancellor introduces new support for lockdown-hit businesses

Following the Prime Minister’s announcement of a new lockdown on 4 January, Chancellor Rishi Sunak has stepped up with a new financial support offering for the worst hit businesses, including those working in the leisure, hospitality and retail industries.

Eligible businesses can now apply for one-off grants of up to £9,000 per business premises, in addition to taking advantage of already existing measures such as the furlough scheme.

Grants will be allocated as follows:

  • £4,000 for businesses with a rateable value of <£15,000
  • £6,000 for businesses with a rateable value of between £15,000 and £50,000
  • £9,000 for businesses with a rateable value >£51,000

Meanwhile, a £594m fund will be made available to local authorities, who will have the discretion to use it to support struggling businesses in other sectors. In total, the package is worth £4.6bn, according to the government.

What other support is available?
In addition to the new measures, eligible firms may also be able to access:

  • Furlough scheme – this has now been extended until April and is currently providing businesses with 80% of furloughed workers’ salaries, with employers covering National Insurance and pension contributions
  • £1.1bn further discretionary grant funding for local authorities
  • Local Restriction Support Grants of up to £3,000 per month

The business reaction
While financial support is always welcome, business groups warn that the new measures do not go far enough, with Tony Danker, director general of the Confederation of British Industry stating that “the comprehensive restrictions required a comprehensive new response” – something he doesn’t believe these measures have achieved.

Meanwhile, director general of the British Chambers of Commerce, Adam Marshall, warned that many smaller firms would not be eligible for the grant, and would instead “be left struggling to see how this new top-up grant will help them out of their cashflow problems.”

While support measures are due to be reviewed and updated in time for March’s budget, many businesses fear that it may be too late.

Sound legal advice
With businesses struggling to survive, many have been forced to make the horrible decision to make some of their staff redundant.

Others have found it difficult to keep up and comply with the government’s ever-shifting guidance. That’s where we come in. Our Employment Law team is fully up to date with the latest rules and guidance, and can help you keep on the right side of the law during this difficult time – one less thing to worry about.

Contact us at employmentlaw@woodfines.co.uk to get started.

-Savanita Atwal 

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