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Businesses to get £1 billion in support as Omicron bites

21 December 2021

The government has announced a new £1 billion bailout package for businesses most impacted by Omicron, as the rise in cases has seen Brits staying away from restaurants, pubs and theatres in the run-up to Christmas.

As Omicron cases continue to soar, chancellor of the exchequer Rishi Sunak has announced one-off grants of up to £6,000 per premises for eligible businesses in the hospitality and leisure sectors. It means that £683 million in targeted grants will be available for hospitality and leisure businesses in England this winter.

More than £100 million of discretionary funding will also be made available for local authorities to support other businesses affected by the new coronavirus variant.

In addition, the devolved administrations will receive around £150 million of funding through the Barnett formula, comprising around £80 million for the Scottish government, £50 million for the Welsh government and £25 million for the Northern Ireland Executive.

As theatres and museums have closed their doors because of cancelled bookings and staff sickness, the government has also announced a further £30 million of funding which will be made available through the Culture Recovery Fund, enabling cultural organisations in England to apply for support through the winter to March 2022.

The government says that it recognises that "the rise of the Omicron variant means some businesses are likely to struggle over the coming weeks". The run-up to Christmas is typically the most profitable time of year for many pubs and restaurants; UK Hospitality has reported that many businesses have already lost 40-60% of their December trade.

In good news for small businesses, the chancellor said that government will cover the cost of Statutory Sick Pay for COVID-related absences for SME employers (with fewer than 250 employees) across the UK. It means that small firms will be reimbursed for up to two weeks per employee. SMEs will be eligible for the scheme from today (21 December 2021) and will be able to make claims retrospectively from mid-January 2022.

Chancellor Rishi 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 £1 billion of support, including a new grant scheme, the reintroduction of the Statutory Sick Pay Rebate Scheme and further funding released through the Culture Recovery Fund.

"To support other businesses impacted by Omicron - such as those who supply the hospitality and leisure sectors - the government is also giving a more than £100 million boost to the Additional Restrictions Grant (ARG) fund for local authorities in England. Local authorities will have discretion to allocate this funding to businesses most in need."

The government has also said that HMRC is ready to support any business impacted by the coronavirus pandemic through its Time to Pay arrangement. Chancellor Rishi Sunak has asked 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, as part of this.

The Federation of Small Businesses (FSB) has welcomed the bailout package. National chairman Mike Cherry said: "These positive measures will help alleviate the intense pressures that small firms are currently under, and hopefully arrest a significant decline in confidence over this year.

"With the prospect of one million people sick or self-isolating by January, we encouraged the chancellor to bring back the COVID statutory sick pay rebate - we're pleased to see our recommendation taken forward today.

"The government has also rightly taken forward other aspects of our ten-point plan, with £1bn worth of grant support for the hardest-hit sectors in England, alongside accelerated delivery of the £1.5bn business rates relief fund for supply chains launched months ago.

"The encouragement of HMRC to give as much breathing space as possible to small firms as we head towards tax return season will also come as a relief to many."

Written by Rachel Miller.

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