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Rishi Sunek meme Has Rishi done enough To save Britain's battered businesses?

Is it too little too late?

Since Boris raised the Covid alert levels in early December and deployed Plan B, UK businesses in the entertainment, arts and hospitality sectors have begged the Chancellor to provide additional financial support.

All of these sectors, whether it be Covent Garden Opera, the Old Vic theatre or your local pub, rely on the weeks leading up to Christmas and the New Year, as their most profitable time of year and desperately need the profits generated over this period to subsidise the quiet trading months of January and February.

So just like Father Christmas, Rishi Sunak rushed to provide gifts for these beleaguered businesses and just in time for Christmas

Omicron Business Support: What were Rishi’s Christmas presents?

The Chancellor announced that his bag of festive goodies, amounted to a one-billion-pound support package for Omicron-hit businesses. The new measures include grants of up to £6,000 per premises for hospitality and leisure businesses, the bringing back of the Statutory Sick Pay Rebate Scheme for Covid-related absences and money for Councils to provide discretionary grants, amongst a raft of measures.

Mr 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. So, we’re stepping in with £1billion of support.” He then went on to provide more detail on the different areas of support.

Omicron Business Support: Premises grants

Just under £700m has been allocated in extra funding for hospitality and leisure businesses, with the Chancellor taking a similar approach to last January’s lockdown and is offering businesses in this sector a one-off grant of up to £6,000 per premises. As with last years’ grants, they will be based on the rateable value of the premises, split into in three bands:

Rateable Value                       £0-15k                         £15-51k                       £51k>

Amount of grant                    £2.7k                           £4k                              £6k

However, to be eligible for a grant, businesses must be solvent and based in England; and whilst the grants are only two-thirds of last January’s payments, most businesses are currently open, as opposed to January 2021 when they were fully closed. The issue of the grants will be by local authorities over the next month, with around 200,000 businesses eligible.

Omicron Business Support: ARG and SSPRS

The Treasury has added £100m discretionary funding to local authorities to support other businesses through the additional restrictions grant (ARG). The grant announced today is in addition to the £250m that local authorities still have to distribute, with priority being given to the local authorities that have distributed most of their existing allocation.

The Chancellor also announced the return of the Statutory Sick Pay Rebate Scheme (SSPRS). The scheme is available for employers with fewer than 250 employees and will reimburse businesses for the cost of Covid-related absences for up to two weeks per employee.

Omicron Business Support: What other support is there?

With Omicron already leading to fewer people going to the panto and West End audiences dropping off, the government has added a further £30m to the culture recovery fund to support theatres, orchestras and museums in England until 1st April 2022.

Other measures include the existing reduced rate of 12.5% VAT for hospitality, business rate relief of up to 100%, the Covid recovery loan scheme and a moratorium on business eviction for unpaid rent.

Omicron Business Support: Are the affected sectors happy with the news?

Underwhelmed, is probably the best way of putting it with many owners complaining that the new measures are a drop in the ocean, compared with their losses. One industry CEO, Nimesh Shah, accused Rishi Sunak of paying lip service to impacted businesses.

“The Chancellor could have been much bolder without hitting the Treasury coffers too hard, by offering deferral for business rates, VAT and taxes to help cashflow. It won’t fix the issue in hand and will not make up for the loss in revenue that hospitality businesses are currently facing,” said Shah.

The industry consensus is the new measures amount to little more than a rather meagre sticking plaster for the majority of businesses. Many companies just don’t know how long customers will stay away, or whether fresh social distancing restrictions could be imposed in the New Year. The Chancellor again said nothing could be ruled out, adding to the dark cloud of uncertainty hanging over the sector.

Tax Accountant’s View

Two days ago, Boris confirmed that he is sticking with his Plan B approach for now and has even shortened the self-isolation period, with self-administered Lateral Flow tests now replacing PCR tests.

Both the Chancellor and the Prime Minister are frantically urging people to get booster vaccinations to bring the virus under control. But if cases continue to surge and a partial lockdown is announced, Rishi will have to dig much deeper into his financial pocket for the hardest hit sectors.