Questions to Government regarding support for SMEs and the hospitality sector

Answered on Tuesday 11 January 2022 by HM Treasury

Fleur Anderson MP: To ask the Chancellor of the Exchequer, what recent discussions he has had with the Secretary of state for Business, Energy and Industrial Strategy on the introduction of additional measures to support (a) small- and medium-sized businesses and (b) the hospitality sector following the Government’s updates on the spread of the omicron covid-19 variant on 15 December 2021; and if he will make a statement.

Helen Whately (Exchequer Secretary to the Treasury) responded:

On 21 December, the government announced £1 billion of new grant support for the hospitality, leisure and cultural sectors in England to protect jobs and businesses from the adverse impacts of the Omicron variant.

The package of support announced includes the reintroduction of the Statutory Sick Pay Rebate Scheme to help small and medium-sized employers cover the cost of Covid-related sick absences, covering up to two weeks per employee. This applies UK-wide.

The hospitality sector in England will benefit from:

• New one-off cash grants of up to £6,000 to support eligible businesses in the hospitality and leisure sectors, totalling nearly £700 million.
• Over £100 million of new discretionary funding has been provided to local authorities to support businesses in other sectors, including in the supply chain for the hospitality sector, that are not eligible for these new grants, supplementing around £250 million of unallocated discretionary grant funding already held by local authorities.

The government has also announced that the devolved administrations will receive £860 million of up-front funding, to help them continue their response to Omicron. As the new cash grants are England -only, Barnett consequentials will lead to a total of around £150 million for the devolved administrations: £80 million for Scotland, £50 million for Wales, and £25 million for Northern Ireland .

HMRC also stand ready to support any business affected by the coronavirus pandemic through its Time to Pay arrangement. As part of this, businesses in the hospitality and leisure sectors in particular will be offered the option of a short delay, and payment in instalments, on a case by case basis.

The government is also waiving late filing and late payment penalties for Income Tax Self-Assessment (ITSA) taxpayers, including those in the hospitality sector, to support cashflow and ease administrative burdens. Taxpayers will not receive a late filing penalty if they file online by 28 February, and will not receive a late payment penalty if they pay their tax in full or set up a payment plan by 1 April.

This additional support is on top of the generous and wide-ranging support package already in place, which the Chancellor announced at the Spring and Autumn Budgets last year. Small and medium-sized businesses can access Government-guaranteed finance through the extended Recovery Loans scheme until June.

Businesses in the hospitality, retail and leisure sectors continue to benefit from capped business rates relief at 66% until the next financial year, when a new capped relief of 50% takes effect. Hospitality and tourism businesses also benefit from reduced VAT at 12.5% until the end of March.

Businesses will also be protected from eviction if they are behind on rent on their premises, thanks to the moratorium in place until March.

As we have done throughout the pandemic, we are closely monitoring the impact of COVID-19 on the economy. We will continue to respond appropriately and proportionately to the changing path of the virus.