Covid-19 and the Impact on Hospitality, Leisure and Tourism Sector
What support is available for your business?
Hospitality, leisure and tourism businesses are going to face tough times over the coming weeks and months. COVID-19 has struck at the worst time of year for many, when cash reserves are at their lowest.
We’ve prepared a summary of the support announced to date.
- A new Coronavirus Job retention Scheme has been introduced for all UK employers to continue paying part of employees’ salaries for those employees that would otherwise have been laid off during the crisis. HMRC will reimburse 80% of furloughed workers wage costs, up to a cap of £2,500 per month. HMRC are working urgently to set up a system for reimbursement. Click here for further information.
- A 12-month business rates holiday for all shops, pubs, theatres, music venues, restaurants and any other hospitality or leisure business. If you have a direct debit in place to pay your business rates then consider cancelling it to ensure amounts are not paid in error.
- A three-month mortgage holiday for those in difficulty because of coronavirus. Approach your mortgage provider directly.
- For commercial mortgages and business loans, many lenders will already offer repayment holidays. Contact your business bank manager to see whether this is available to you.
- A cash grant of £25,000 for those businesses with a rate-able value of between £15,000 and £51,000. There are also cash grants of £10,000 for businesses receiving Small Business Rate Relief (up to a rate-able value of £15,000). Funding is being providing by local authorities. These grants have now started to be paid out. Although the Government says it will be automatic, it seems some local authorities are requesting bank details/applications. Please refer to your own local authority dedicated Covid-19 web pages.
- Interest-free (for 12 months) business interruption loans and overdrafts up to £5m. Contact your business bank manager to remain informed on whether this is available to you.
- VAT and Income Tax payment deferral. VAT payments will be deferred for 3 months. Income Tax payments due in July 2020 under Self-Assessment will be deferred to January 2021. For VAT, the deferral will apply from 20 March 2020 until 30 June 2020 and all UK businesses are eligible. This is automatic and no applications are required. VAT refunds and reclaims will be paid as normal. No penalties or interest for late payment will be charged in the deferral period.
- HMRC have scaled up their Time To Pay arrangements. All businesses and self-employed people in financial distress and with outstanding tax liabilities can ask to spread amounts due over a period of time. These will be assessed on a case by case basis. Telephone the helpline on 0800 0159 559.
- Small and medium sized businesses can reclaim up to 2 weeks of SSP paid to employees who are absent due to Coronavirus – the Government will work with employers over the coming months to set up the repayment mechanism “as soon as possible”.
- Planning rules will be relaxed to allow pubs and restaurants to provide take away hot food and drinks services. If you intend to take advantage of this then you should inform your local planning authority of the change in services.
- Your obligations for refunding deposits to future guests will depend upon your terms and conditions or those of the online agent through which the booking was made. If the terms and conditions state the deposit is not refundable then you can retain these funds. However, you may wish to issue vouchers for a future date to encourage a visit from these potential guests. You can also encourage others who are entitled to refunds to accept vouchers in the same manner.
- Review your workforce, employment contracts and consider your options – you should talk to your solicitor to ensure you don’t fall foul of your contractual obligations or Employment Law.
- Check your insurance policies – although insurance cover will vary significantly, some policies protect businesses from loss of earnings arising from pandemics or Government closure.
Understandably you are very concerned about how this pandemic will affect your hospitality, leisure and tourism business day-to-day and the impact of this long term. Please remember as your trusted adviser, we're with you with any immediate planning or questions you might have.
If you'd like to speak with one of our advisers, please call 0808 144 5575 or email firstname.lastname@example.org, or contact Richard Andrew below.