January 2022 / United Kingdom

New grant funding for businesses impacted by the pandemic.

• Businesses in England most impacted by COVID-19 and the Omicron variant to benefit from £700 million in government grants delivered by local councils
• hospitality, leisure and accommodation businesses will be able to apply for one-off cash grants of up to £6,000
• businesses are urged to engage with their council and apply for funding

Businesses in England most impacted by the Omicron variant will be able to tap into a multimillion-pound support package in the coming weeks, as the government today (7 January) delivered funding to councils across the country.

Firms in the hospitality, leisure and accommodation sectors, many of which 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

In addition, more than £100 million worth of discretionary funding is also being made available for local authorities to support other businesses.

Business Secretary Kwasi Kwarteng said:

All through the pandemic we have stood by the side of business to ensure they are supported at every stage. The spread of the Omicron variant is presenting new challenges, particularly for the hospitality and leisure sectors, so it’s only right that we are stepping up with an urgent £1 billion support package.

I urge businesses to come forward, engage with their local council and tap into these cash grants, which will help to cover costs and protect jobs as we double down on our efforts to get boosted and defeat this virus.

The grant funding forms part of a £1 billion support package which includes an additional £30 million for the Culture Recovery Fund and reintroducing the Statutory Sick Pay Rebate Scheme - reimbursing eligible businesses for the cost of Statutory Sick Pay for COVID-related absences.

Rishi Sunak, Chancellor of the Exchequer said:

We know the Omicron variant has hit our hospitality and leisure businesses – which is why, as we have throughout the pandemic, we stepped in to help.

From today, local councils will be able to distribute this £1 billion package of support to the hundreds of thousands of pubs, restaurants and theatres in need – protecting the millions of people they employ.

Businesses are encouraged to apply to their council for grant funding which will be administered over the coming weeks. Find your local authority on GOV.UK.

Businesses eligible for grants are those that offer in-person services, where the main service and activity takes place in a fixed rate-paying premises, in the hospitality, leisure and accommodation sectors. For example, this includes businesses whose main function is providing a venue for the consumption and sale of food and drink, those that provide facilities linked to recreation and entertainment, as well as businesses whose main premise is used for holiday accommodation.

The government has chosen to provide generous grants that are the same size as the monthly cash grants provided to hospitality businesses when they were fully closed earlier this year – despite businesses now being still able to trade.

Other businesses impacted by Omicron, such as those that supply the hospitality and leisure sectors as well as personal care services, are also able to apply for grants with the government allocating more than £100 million 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 Business Secretary has written to those local authorities who have more than 5% left over from previous ARG funding rounds, instructing them to disburse their remaining funding.

Additional information

The £1 billion support package consists of:

• £635 million for targeted grants for hospitality and leisure businesses in England
• £102 million top-up for the Additional Restrictions Grant
• £30 million for Culture Recovery Fund
• £154 million of Barnett funding covering all three above
• Funding for the Statutory Sick Pay Rebate scheme will be additional to these amounts

Further information will be available in the published factsheets.

The one-off grants of up to £6,000 for eligible businesses in the hospitality, leisure and accommodation sectors, depend 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 additional funding is the third top-up to the ARG scheme. The most recent data on local authority payments to businesses is to 28 November 2021 and so does not capture any recent spending. As of this date 88% of the funding available prior to this third top-up had been spent
• note that local authority funding allocations for the Omicron Hospitality and Leisure Grant have been calculated using the latest available data (31 March 2021) on business numbers provided by the VOA
• figures by local authority are available on request

Source: Press Release

In Finance Act 2021, the Government legislated to reform penalties for late submission and late payment of tax, initially from 1 April 2022,  and to align interest charges for VAT with other major taxes. Today, I am announcing that these changes for VAT businesses  will now be introduced 9 months later, on 1 January 2023. HMRC is committed to becoming one of the most digitally advanced tax authorities in the world. The ambition and pace of change needs to be balanced with  well-tested systems and  good customer service, particularly when businesses are facing additional challenges and uncertainty. This  extra  time allows HMRC to ensure the IT changes necessary for the new penalties and interest charges can be introduced as effectively as possible,  ensuring a high standard of service to customers.   Statement made by Lucy Frazer, The Financial Secretary to the Treasury Conservative

Plans to strengthen the rules on cryptoasset advertisements and protect consumers from misleading claims were published by the Government today 18 January.

• The government plans to legislate to address misleading cryptoasset promotions
• Adverts will be brought into line with other financial advertising, ensuring they are fair and clear
• New rules will increase consumer protection while encouraging innovation

Around 2.3 million people in the UK are now thought to own a cryptoasset with their popularity rising - but research suggests that understanding of what crypto actually is is declining, suggesting that some users may not fully understand what they are buying. This poses a risk that these products could be mis-sold.

The consultation response, published today, sets out the government’s plan to bring the promotion of cryptoassets within the scope of financial promotions legislation. This means the promotion of qualifying cryptoassets will be subject to FCA rules in line with the same high standards that other financial promotions such as stocks, shares, and insurance products are held to.

This will balance the desire to encourage innovation with the need to ensure that cryptoasset advertisements are fair, clear, and not misleading.

Chancellor of the Exchequer, Rishi Sunak said:

Cryptoassets can provide exciting new opportunities, offering people new ways to transact and invest – but it’s important that consumers are not being sold products with misleading claims.

We are ensuring consumers are protected, while also supporting innovation of the cryptoasset market.

The government is eager to support innovation in cryptoassets and recognises the potential benefits of certain products like stablecoins, such as providing a more efficient means of payment, and in 2018 the government launched the the Cryptoasset Taskforce, which continues to steer the UK’s regulatory response to the cryptoasset market.

However, research undertaken by the FCA highlighted the potential for misleading advertising of crypto products to cause consumer harm.

The Government’s decision to bring these types of advertisements into the scope of regulation will mitigate the risks of consumer harm, ensuring people have the appropriate information to make informed investment decisions.

This will be done via secondary legislation to amend the Financial Promotion Order, which sets out the investments and activities to which the financial promotion regime applies. Under the Financial Services and Markets act 2000, a business cannot promote a financial product unless they are authorised by the FCA or the PRA, or the content of the promotion is approved by a firm which is. Firms that wish to promote such investments and activities must comply with binding rules that financial promotions must be fair, clear, and not misleading.

This will provide the Financial Conduct Authority with the appropriate powers to regulate the market more effectively. The FCA will shortly be consulting on their proposed financial promotions rules that will apply to cryptoassets.

Further information

• The government intends to put in place a suitable transitional period (approximately six months) from both the finalisation and publication of the proposed Financial Promotion Order regime and the complementary FCA rules
• The legislation will be brought forward once parliamentary time allows
• Consultation response available here
• FCA Cryptoasset consumer research 2021

• Today’s announcement complements broader proposals on cryptoassets and stablecoins set out via the government’s consultation on a regulatory framework for stablecoins last year, with next steps due to be announced in due course

Source: HM Treasury  

On 11 January 2022, the United Kingdom (UK) launched a public consultation seeking input on the domestic implementation and administration of the newly released model rules on the OECD-led global anti-base erosion (GloBE) proposal under Pillar Two.

The public consultation, particularly, seeks feedback on the following:

• how the model rules should be translated into UK legislation;
• how the model rules should be administered; and
• what implementation issues may ensue that should be addressed in the envisaged implementation framework.

Additionally, the consultation seeks public input on the introduction of a UK domestic minimum tax (DMT), as well as on a wider reform to the existing UK Base Erosion and Profit Shifting (BEPS) legal framework.