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Support for Scottish businesses

The Scottish Government announced a £2.2 billion package of support offered to help Scottish businesses during the Pandemic.

On 17 March, the UK Government announced details of a £350 billion support package for UK businesses to assist during the global COVID-19 crisis. Scotland followed on 18 March with a £2.2 billion package of support offered by the Scottish Government to help Scottish businesses during the pandemic - this supersedes the £320 million package that was initially offered on 14 March.

Businesses in Scotland can benefit from the following:

  • Support for businesses which are currently paying sick pay to employees;
  • Support through the Coronavirus Business Interruption Loan Scheme (this will be interest free for 12 months);
  • Support with tax payments through HMRC;
  • Coronavirus Job Retention Scheme; and
  • Deferral of next quarter’s VAT payments.

In Scotland, there are around 350,000 private sector enterprises, with a population of over 5 million. The Secretary for Economy, Fair Work and Culture, Fiona Hyslop, addressed the Scottish parliament outlining the steps being taken by the Scottish Government to support businesses during this time. The financial support package will be available from the 1 April and includes:

  • 12 months’ relief of 100% on non-domestic rates for retail, hospitality and leisure business (and a 1.6% rates relief for all other non-domestic properties in Scotland);
  • £10,000 grants for small businesses in receipt of the Small Business Bonus scheme or rural relief;
  • Grants of up to £25,000 for hospitality, leisure and retail businesses with a rateable value between £18,001 and £50,999;
  • First Minister to hold an emergency meeting of the Financial Services Advisory Board;
  • Local authorities have been urged to relax planning rules, allowing pubs and restaurants to be able to operate on a temporary basis as a takeaway;
  • The ‘go live date’ for the deposit return scheme has been extended to July 2022;
  • The Visitor Levy Bill will be halted

Although the Scottish Government has broadly followed Westminster, some elements of business support are devolved, therefore they may differ in Scotland, Wales and Northern Ireland.

Hospitality, leisure and retail sectors

For the hospitality, leisure and retail sectors the rateable value differs north and south of the border. In England, for businesses with a rateable value of under £15,000, they will receive a grant of £10,000. For businesses with a rateable value of between £15,001 and £51,000, they will receive a grant of £25,000.

Coronavirus Job Retention Scheme

The UK Government announced that wages of employees who are unable to work due to the pandemic will be paid at 80% of their salary by the Government to allow staff to be kept on by their employer. This is available to all UK businesses.

More support is being requested by the Scottish Government for self-employed workers affected during the pandemic. The Scottish Government is campaigning for the job retention scheme to be extended to include the self-employed. Countries such as Norway and Denmark have announced wage support packages to cover the self-employed by calculating lost incomes based on previous years’ work. At present, Scotland has around 330,000 self-employed workers.

Support for nurseries

In England, a business rates holiday has been introduced for nurseries for the 2020-2021 tax year. Councils will apply this automatically to the council tax bill in April 2020. Since April 2018, all Scottish nurseries have received full business rates relief following a decision by the Scottish Government.

Scotland will continue to work alongside the UK Government and the other devolved administrations, to ensure that the response is coordinated.

If the content of this update raises any issues for you, or you would like to discuss, please liaise with Claire McCracken, Partner at claire.mccracken@weightmans.com.

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