Struggling Firms Promised over £1bn in Government Support

Written by: Keith Tully

Updated: 23rd December 2021

Businesswoman with struggling FirmBusinesses within the hospitality and leisure sector in England have been promised more than £1 billion in support to help them survive the latest wave of coronavirus.

Operators in those sectors are likely to be among the most badly impacted by the spread of the Omicron variant of Covid-19 in the short-term and so the government has promised them up to £6,000 per premises in one-off grants.

A further £100 million in discretionary funding is also being allocated to local authorities, who will also be responsible for distributing the one-off grant money intended for struggling firms across the country.

The sudden rise in cases of Covid-19 in recent weeks since the Omicron variant arrived in the UK has been devastating for the hospitality and leisure sectors, who rely on the festive period for a significant proportion of their annual trade.

Several representative trade bodies have been warning the government that businesses would be pushed to the brink of collapse if they were not financially supported during the Omicron wave.

Around 200,000 businesses are expected to be eligible for the one-off grants now being funded by central government and administered locally.

The trade body UKHospitality has welcomed the promise of grants for struggling businesses and for operators within hospitality sector supply chains.

According to UKHospitality’s chief executive Kate Nicholls, there is now an urgent need to ensure that the money that’s being pledged to help businesses across the country reaches the intended recipients as quickly as possible.

Ms Nicholls describes the government’s financial support package as being generous and much needed by businesses that “through no fault of their own, have seen their most valuable trading period annihilated”.

“It will help to secure jobs and business viability in the short term, particularly among small businesses in the sector,” she added.

Another aspect of the government’s plan to support businesses being impacted by the Omicron wave is an official encouragement for HMRC to offer flexibility around tax payments.

The Treasury has explained that the chancellor Rishi Sunak recently instructed HMRC to “offer businesses in the hospitality and leisure sectors in particular the option of a short delay, and payment in instalments, on a case by case basis”.

Mike Cherry, chairman of the Federation of Small Businesses (FSB), has said those instructions to HMRC will “come as a relief to many” heading into the new year.

Keith Tully

Keith Tully

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Keith has been involved in Business Rescue since 1992, during which time he’s worked for both independent and national firms. His specialties include company restructuring matters and negotiating with HMRC on his clients behalf.

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