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New COVID-19 business grants for 2022

Though the government’s ‘Plan B’ didn’t require business closures when it came into effect in December, the limits on socialising and other COVID-19 restrictions still led to dramatic losses for the hospitality and leisure sectors over the festive season. To help businesses recover from the effects of the Omicron variant, a new support package was announced on 21st December 2021.

Since 7th January 2022, the government has been distributing millions of pounds of funding to councils across England. Thousands of businesses can apply for grants of up to £6,000 per premises, plus other discretionary funding from their local authorities. Applications will close on 18th March, so read on to find out more about the COVID-19 grants available and how businesses can apply.

Which coronavirus support grants are available in 2022?

This Omicron business support scheme is providing almost £700 million in targeted grants for hospitality and leisure premises in England. The size of the grant depends on the Rateable Value of the premises, with the maximum being £6,000 for properties with an RV of more than £51,000.

The government is also temporarily reintroducing the Statutory Sick Pay Rebate Scheme (SSPRS), allowing businesses with less than 250 employees to reclaim the costs of up to two weeks’ Statutory Sick Pay per employee from 21st December 2021, for any absences due to the Omicron variant.

Additionally, local authorities in England will receive part of the £102 million for discretionary funding. Check the website for your local council to see if you could be eligible for a discretionary grant. The Culture Recovery Fund is also receiving £30 million to support theatres and museums.

Who is eligible for this COVID-19 business support package?

In order to be eligible for an Omicron hospitality and leisure grant, businesses must be solvent ratepayers – meaning no administration or striking-off notices – and also meet these conditions:

  • Providing in-person services within the hospitality, leisure, or accommodation sector
  • Deriving at least 50% of income from these sectors, if also operating in other sectors
  • Being on the Valuation Office Agency (VOA) ratings list
  • Not exceeding ‘State Aid’ or subsidy allowance limits

Examples of eligible businesses in these sectors include restaurants, hotels, bars, cinemas, event venues, and amusement parks. It excludes takeaways, gyms, and residential dwellings. Check with your local authority for the specific definition requirements to see whether your business qualifies.

Those eligible for the new Omicron business grant
will receive the following payments (according to the Rateable Value of the premises from 30th December 2021):

  • £15,000 or less = £2,667 grant
  • Over £15,000 but less than £51,000 = £4,000 grant
  • £51,000 or above = £6,000 grant

Depending on your local authority, the closing date for applications may be as late as 18th March 2022 – but all payments must be made by 31st March 2022. The grant will then fall within the 2021 tax year, so you must declare it and any other COVID-19 funding you receive on your tax returns.

In some cases, eligible businesses may receive grants automatically, but it’s worth checking whether you need to register to apply. Many authorities allocate grants on a ‘first come, first served’ basis, so you don’t want to leave it too late and find out that the funding has run out by the time you apply.

What are the tax implications of COVID-19 business support grants?

If a business receives a grant, HMRC will consider this taxable income. So, if you receive a COVID-19 grant payment before 5th April 2022, then this will count towards your taxable income for the tax year from April 2021 to April 2022. It’s your responsibility to declare grant income on tax returns.

However, tax may not be due on grant income if your business doesn’t make an overall profit. If your business could benefit from advice on grant eligibility and tax liability, get in touch with the expert tax consultants
at GBAC. Give us a call on 01226 298 298 or send us an email at info@gbac.co.uk
to discuss your requirements, and our team of accountants in Barnsley
will do their best to assist you.