Business Support

A reminder that the temporary extension to the eligible carry back period for trading losses applies for company accounting periods ending between 1 April 2020 and 31 March 2022 and for tax years 2020-21 and 2021-22 for unincorporated businesses. This extended loss relief allows trading losses to be carried back for three years (rather than one).

The extended relief was introduced to help businesses who suffered increased losses as a result of the coronavirus pandemic. Carrying back a trading loss may allow businesses to generate tax repayments from an earlier profit-making period. 

The extension to the relief applies to both incorporated and unincorporated businesses and is subject to a £2,000,000 cap. The £2,000,000 maximum applies separately to unused trading losses made by incorporated companies, after carry-back to the preceding year, in relevant accounting periods ending between 1 April 2020 and 31 March 2021 and a separate maximum of £2,000,000 for periods ending between 1 April 2021 and 31 March 2022.

The £2,000,000 for companies is subject to a group cap for each relevant period. Extended loss carry-back claims must usually be made as part of a company tax return. However, smaller claims below a de minimis limit of £200,000 may be made without having to wait to submit a company tax return.

The government has been working for a number of years to combat the problem of large businesses abusing their position by making late payments to small businesses. There is a legal requirement (introduced in April 2017) for large businesses to report publicly on their payment practices.

A large business is defined as a company or limited liability partnership that has at least two of the following:

• £36 million in turnover
• £18 million on its balance sheet
• 250 employees

Large businesses within the scope of the rules must prepare and publish information about their payment practices and performance in relation to qualifying contracts. There are normally two reporting periods within the business’ financial year. The report must be submitted within 30 days of the end of the reporting period. It is a criminal offence by the business, and every director of the company or designated member of an LLP, if the business fails to publish a report containing the necessary information within the specified filing period of 30 days.

For each reporting period, businesses are required to report on the following in relation to qualifying contracts the statistics on:

• the average number of days taken to make payments in the reporting period, measured from the date of receipt of invoice or other notice to the date the cash is received by the supplier
• the percentage of payments made within the reporting period which were paid in 30 days or fewer, between 31 and 60 days, and in 61 days or longer
• the percentage of payments due within the reporting period which were not paid within the agreed payment period.

You can check a large supplier's status payment status at www.gov.uk/check-when-businesses-pay-invoices#more-information.

The Secretary of State for Business, Energy & Industrial Strategy has written a letter to local authorities in England urging them to help support businesses in the hospitality and leisure sectors as efficiently as possible. 

Just before Christmas, the Chancellor, Rishi Sunak announced a support package for businesses most impacted by the Omicron variant. The biggest single measure was the re-introduction of one-off grants of up to £6,000 for businesses in the hospitality and leisure sectors (in England). It is thought that some 200,000 businesses will be eligible for these new grants.

We are reminding eligible businesses in these sectors that they can apply to their local authority for one-off grants of up to £6,000 per premises, depending on rateable value:

• Businesses with a rateable value of £51,000 or above: £6,000
• Businesses with a rateable value between £15,000 and £51,000: £4,000
• Businesses with a rateable value of £15,000 or below: £2,667

The government also announced that £102 million top-up for discretionary funding would be made available for local authorities to support other businesses outside the hospitality and leisure sectors, for example, suppliers to these sectors.

In the letter, we are told that the Secretary of State for Business, Energy & Industrial Strategy has personally written to those local authorities who have more than 5 per cent of previous funds left over, instructing them to distribute the money to those that need it.

Local authorities have also been told that the sooner applications are processed, and funds are distributed, the sooner the government will be able to provide businesses with the confidence and security they urgently need.

The devolved administrations in Scotland, Wales and Northern Ireland have received an additional £150m through the Barnett formula to offer similar measures. This will see approximately £80 million allocated to the Scottish Government, £50 million to the Welsh Government and £25 million to the Northern Ireland Executive.
 

Just before the Christmas break, the Chancellor announced a new support package for some businesses most affected by the Omicron variant.

The biggest single measure was the re-introduction of one-off grants of up to £6,000 for businesses in the hospitality and leisure sectors many of whom have seen their seasonal trade hugely impacted by this latest COVID-19 variant. It is thought that some 200,000 businesses will be eligible for these new grants. On 7 January 2022, the government delivered funding to councils across England to provide these one-off grants.

This means that firms in the hospitality, leisure and accommodation sectors, many of whom have seen a decline in footfall and increased cancellations due to the Omicron variant, will be able to apply for one-off grants of up to £6,000 per premises depending on rateable value:

• businesses with a rateable value of £51,000 or above: £6,000
• businesses with a rateable value between £15,000 and £51,000: £4,000
• businesses with a rateable value of £15,000 or below: £2,667

The government will also provide for a £102 million top-up for discretionary funding to help local authorities support other businesses outside the hospitality and leisure sectors.

The devolved administrations in Scotland, Wales and Northern Ireland will receive an additional £150m through the Barnett formula to help offer similar measures. This will be allocated with around £80 million going to the Scottish Government, £50 million to the Welsh Government and £25 million to the Northern Ireland Executive.