EDIT 27th March: this post only covers government support for limited companies. For support for the self-employed, see this post.
On Tuesday 17th, the chancellor Rishi Sunak came out with a wave of measures to help British businesses survive the COVID-19 pandemic. The number that caught headlines was his “£350 billion lifeline for the economy”. But what does it mean for Race Directors?
The support comes in 4 forms:
– Cash grants
– Business rates relief
– Employee sick pay repayment
The last two measures are intended mainly for larger businesses, so this post only looks at the first two measures.
Note that these two measures will only support limited companies, and not charities, voluntary organisations (e.g. running clubs) or sole traders (i.e. self-employed). If you’re self-employed, see this post in which I go into detail about your options. If you’re a limited company, read on.
What am I eligible for?
It’s all about what business rates you pay. First we’ll look at cash grants, then at business rates relief. In each case, we’ll start from the smallest businesses and work our way up.
1. Cash Grants
If, like most Race Directors, you don’t pay business rates and don’t have a business premises (i.e. you work from home), then currently you’re not eligible for a cash grant.
If you do have a business premises and are eligible for Small Business Rate Relief (“SBRR”; learn more here), you are eligible for the £10,000 grant. (NB it’s a grant, not a loan, so it does not need to be paid back.)
If you are a larger business, and ineligible for SBRR, then right now you are ineligible for a grant. This is because grants at that level are only being made available to businesses in the “Retail, Hospitality, and Leisure” (RHL) sectors. Right now, races are not being included in this. By contrast, RHL businesses at this level are eligible for grants of up to £25,000 each.
For businesses with rateable values over £51,000 (very few race organisations), more information will be published shortly after 23rd March. This is likely to be done through loans not grants.
I’m eligible for SBRR. How do I claim my £10,000 grant?
There’s a lot we still don’t know. It’s been announced that the Department for Business, Energy & Industrial Strategy will be writing to local authorities this week to outline the scheme. And we’ve been told that once it’s up-and-running, your local authority will contact you, and you won’t have to apply yourself.
How the government actually administrates this measure to make sure that all the smallest businesses get a £10,000 grant still needs a lot of clarification. In all likelihood there will be an element of business applying proactively to local authorities to get the grant.
Funding will not be available until April.
2. Business Rates Relief
If you don’t currently pay business rates, then clearly this doesn’t apply to you.
If you do pay business rates, at any level, then currently you are not eligible for any “holiday” from rates. Again, this is because rates relief is only being given to the “Retail, Hospitality, and Leisure” sectors right now, and that doesn’t currently include races.
That’s a lot to take in, so we’ve summarised the measures in this table, and broken them down by Rateable Property Value (which determines what business rates you pay) and also by RHL vs Races:
Green = changed by the chancellor’s measures
Red = unchanged by the chancellor’s measures
RHL = Retail, Hospitality, Leisure (this currently does NOT include races)
*Businesses in these categories are eligible for SBRR. Those with rateable values below £12k don’t currently pay any business rates anyway.
† “No holiday” just means you’ll pay your normal business rates – you won’t get any relief.
I own my own company and pay myself a dividend. What will I get?
If your business occupies a property and is eligible for SBRR, then you’re eligible for a £10,000 grant (as explained above). If you don’t occupy property, you won’t be eligible for the grant.
Beyond that, it’s not clear what you’ll get. Regarding the Self-employment Income Support scheme announced on Thursday 26th, this BBC article clearly says that “Company owners who pay themselves a dividend are not covered.”
Will you benefit from the 80% salary protection scheme for furloughed employees that the chancellor announced on Friday 20th? My best guess (and it is only a guess at this stage) is this: the 80% protection scheme is based on an employee’s February earnings. So if you paid yourself a salary in February, then the government will offer to cover 80% of that salary (up to a maximum of £2500 per month). But if you did not, then you will have to fall back on Universal Credit.
I’ve written another post (about the self-employed) that goes into much more detail on the Self-employment Income Support scheme and Universal Credit.
If you have any other questions about these measures, just let me know via [email protected] It’s a fast-changing situation – there’s a lot we still don’t know, but I’ll do my best to answer.
I’ll be coming back with regular updates as these measures are fleshed out by government.
Very best of luck to everyone in these most uncertain and difficult times.