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Coronavirus: Tax reliefs and support to businesses in Wales

23 April 2020
Tax | DWF
In addition to the relief provided by the UK Government, the Welsh Government has announced financial support in the sum of £1.9 billion to assist businesses and workers in Wales to deal with the impact of COVID-19.

In addition to the relief provided by the UK Government (see our summary here) the Welsh Government has announced financial support in the sum of £1.9 billion to assist businesses and workers in Wales to deal with the impact of Covid-19.

Welsh Government business grants (Non-domestic rates Grant)

There are two grants available depending on the type of business and rateable value of the business premises:

Grant 1: A grant of £25,000 will be offered to retail, leisure and hospitality businesses in Wales occupying properties with a rateable value between £12,001 and £51,000. This grant is available to businesses occupying properties such as shops, restaurants, cafes, pubs, cinemas, live music venues, hotels, and self-catering accommodation.

Grant 2: A grant of £10,000 will be offered to all other businesses eligible for small business rates relief for properties with a rateable value of £12,000 or less. The multiple property restriction which applies to small business rates relief also applies to this grant, which means that the same ratepayer can only receive the grant for a maximum of two properties in each Local Authority area. 

The grants are only available to businesses registered to pay business rates as of 20 March 2020 on their premises.

Businesses qualifying for these grants do not have to apply as they will be dispensed through the business rates system by local authorities.  Further details of how to access the grants will be provided by each local authority (see here for further information)

Welsh business rates relief

Retail, leisure and hospitality businesses in Wales occupying properties with a rateable value under £500,000 have been provided with a 12 month business rate holiday, applying from 1 April 2020 to 31 March 2021. 

The relief is available to properties occupied as of 1 April 2020, but empty properties may also receive a 100% reduction in rates of the first three months of being empty (which may be extended to six months). 

Businesses with property with a rateable value over £500,000 will not benefit from this relief (though it is estimated that less than 200 properties will be affected). The Welsh Government will be contacting such businesses to advise them of this, but it is possible that these businesses may still be eligible to apply for relief if there is a strong case for additional support. 

Detailed guidance from the Welsh Government on eligibility for the relief can be found here Our Tax team regularly advises on a range of business rates matters, including the availability of reliefs. Please contact the team if you would like any assistance. 

Economic Resilience Fund 

The Welsh Economic Resilience Fund will provide the following grants to businesses:

  • £100 million Covid-19 Wales Business Loan Scheme administered by the Development Bank of Wales;
  • £100 million fund to support microbusinesses; and
  • £300 million fund to support SMEs and large businesses. 

The Wales Business Loan Scheme allowed limited companies, partnerships and sole traders trading for over two years to obtain a loan up to £250,000. However, the scheme is no longer available as it was fully subscribed within a week of its launch.

The other funds will provide:

  • grants of £10,000 for micro-businesses employing up to nine people. This includes sole traders employing staff;
  • grants of up to £100,000 for small and medium sized businesses employing 10-249 employees; and
  • grants to support larger companies which, in the view of the Welsh Government, are of critical social or economic importance to Wales. More detail is expected shortly from the Welsh Government about the eligibility for this grant. 

The support for microbusinesses is available to those that are not eligible for the business rate grant or the support of the UK-wide self-employed income support scheme. The business will have to demonstrate that it: 

  • has an operating address in Wales, and has between one and nine employees;
  • is VAT-registered, or its business is exempt from charging VAT (with a turnover in excess of £85,000); 
  • has experienced a drop in turnover greater than 40% due to Covid-19 (since 1 March 2020) and provide details of the reduction; and
  • aims to maintain employment for 12 months. 

To be eligible for support for a SME, the business will have to demonstrate that it: 

  • is headquartered in Wales or has an operating address in Wales with full decision-making authority;
  • is VAT-registered, or its business is exempt from charging VAT (with a turnover in excess of £85,000); 
  • has experienced a drop in turnover greater than 60% due to Covid-19 (since 1 March 2020) and provide details of the reduction; and
  • is able to demonstrate a sustainable business plan to trade out of the current crisis. 

The Welsh Government has an eligibility checker which contains further conditions and is available here

If you would like to discuss any of the tax measures referred to, please contact your usual DWF contact or a member of the Tax team. 

Further Reading

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