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Govt sets out new BEAT measures

Photo by Alice Mascarenhas

The latest BEAT 5.0 measures were announced on Friday, aimed at providing financial support and “certainty in cashflow terms” particularly for businesses that were required to close at the end of December.

Restaurants and bars were initially required to close in order to curb the spread of Covid-19 before the Christmas season, but all non-essential retailers, hair and beauty salons, and gyms were required to close shortly after.

“As we continue this work in dealing with the pandemic and finalise our plans for the rollout of the vaccine, it is important also that we work to provide security and support for our business community for our entrepreneurs and for our wealth creators,” Chief Minister Fabian Picardo told reporters on Friday.

“It is on them that we will rely heavily to help get us back to some sense of normality in the coming months and to deliver economic growth in years to come.”

The new BEAT 5.0 measures are targeted at those businesses that have been closed down, and further providing increased support to other firms for the month of January.

BEAT 5.0 – INCREASED BEAT PAYMENTS

The January BEAT payment for businesses that were closed by Government order on the December 28, 2020 will be increased from 30% to 100% for the month of January only.

For those businesses not required to close and who remain able to operate, the January BEAT payment will be automatically increased from 30% to 40%.

Mr Picardo said that he appreciated that these businesses may be experiencing a “significant downturn in trade due to the lockdown measures”, and the Government has increased its support to them.

The Government hopes and expects that businesses will reopen by the January 31, at which time all BEAT payments will revert to the 30% previously being paid and these payments will continue until March 31.

All of these new measures are in addition to the existing support that businesses have been receiving which cover the period from January 1 to March 31, 2021, as announced by the Chief Minister’s Statement to Parliament last month.

The existing measures are as follows: a payment of 30% of the original BEAT grant scheme; a 100% waiver of payment of rates for the wholesale, retail, hotel, bar and restaurant sectors; for all other sectors an additional 25% early rates payment discount, except for supermarkets and pharmacies.

In addition, there is a 50% discount on all Government rent and licence fees, and 25% for private landlords; a restriction on all rental and licence fee increases; a waiver of tables and chairs licences fees on Government owned premises and a 50% reduction on private sector premises; continued import duty waiver scheme for businesses.

The measures also included a waiver of work permit and registration and administrative fees; a moratorium on insolvency claims; and a Bank Guarantee Scheme to enable lending to Covid-related distressed businesses.

These measures were designed and intended to assist businesses that were open and whose customers were not lockdown down, but the tighter restrictions announced last month led to a significant additional number of businesses to close down.

MAKING A CLAIM

All businesses that were required to close down, and others currently in receipt of BEAT support payments, will receive an email from the relevant Government department inviting them to claim for these measures by completing the appropriate form that will be attached to that email.

Catering and restaurant businesses are also able to apply and the deadline for receipt of these applications is January 15, 2021.

The scheme is also open to self-employed people who are working within any of the sectors that the Government have closed down.

New businesses - including newly registered, self-employed persons - from these sectors that have not previously received BEAT are also invited to apply by requesting the claim form from beatcovidgrants@gibraltar.gov.gi
To facilitate the process businesses are encouraged to complete and submit the form in Excel format.

“Government expects these increased BEAT payments to be used by businesses to ensure that staff are paid,” Mr Picardo said, referring to those businesses claiming the full 100% of BEAT 5.0 payments.

“We require that participating businesses undertake to pay their employees their contracted salaries or the payments provided for under BEAT 1.0 for those on zero-hour or agency contracts, up to a maximum of £1,155.”

“These payments to workers are to be paid without discrimination on the grounds of nationality or place of residence.”

“This is a condition of the payments being accepted by businesses.”

Participating businesses may, however, retain any surplus solely and exclusively for meeting their ongoing business expenses.

Businesses will be required to confirm that they are up to date with their tax and social insurance obligations but PAYE, on earnings up to £1,155, and social insurance will be waived for the month of January only. This will follow the same mechanism that was adopted for BEAT 1.0.

As with previous BEAT payments, the Government will aim to make payments on or before the end of the month.

“The amounts will continue to be paid as a grant, so participating businesses may keep any surplus, provided these monies are used solely and exclusively for their ongoing business expenses,” Mr Picardo said.

“As and when we lift the lockdown restrictions and we allow businesses to reopen, BEAT payments will revert to 30% from that time until March 31.”

“Our support will continue at these new levels at least until businesses are permitted to reopen, which we hope and expect to be before January 31 as our vaccination programme is introduced and our number of active cases reduced once more.”

RENTAL DISCOUNT SCHEME

For the month of January only, the rental discount scheme will be increased from 25% to 50% for private tenancies matching the discounts being provided to Government-owned premises for those businesses that have been required to close.

The Chief Minister said the Government sincerely appreciates the continued support of our private landlords in providing this discount.

This is expected to be a temporary increase to the rental discount scheme for the month of January only.

LOAN & MORTGAGE REPAYMENTS

The Government will also be asking all lenders to work positively with any borrower who might need a one-month repayment holiday in respect of business loans, mortgages or other borrowings.

WAIVER OF RATES FOR VOID PROPERTIES

Following representations made by the Gibraltar Landlord’s Association at the latest CELAC meeting, Government will be introducing a rates waiver for any business premises that are vacant and unoccupied from January 1 to December 31, 2021.

Applications to claim this relief should be made to the Valuation Officer at LPS’s Rates Department.

The Minister for Business, Tourism, Transport and The Port, Vijay Daryanani, said: “We believe that affected businesses will welcome these new measures, in particular the increased BEAT payment to 100% and the increased rental discount scheme.”

“Taking these measures together, businesses can count on the right support towards their employee costs and other business expenses.”

“We have listened to CELAC and are seeking to provide the best support we can in the circumstances, and provide the comfort and certainty that these measures will continue until March 31, 2021, at the appropriate rate.”

Meanwhile Mr Picardo said: “As the year starts we can see a way out of this pandemic and we hope to start our vaccination program in the coming days.”

“Nonetheless we recognise that the Government has had to lock down parts of the economy in the interests of containing this health pandemic and preserving life.”

“This increased financial support package is a result of the advice we took from CELAC and builds on our past experience now with some end in sight.”

“It is a package that is flexible and quick to deploy; it is easy for businesses to understand and it is straightforward for Government to administer over what we hope will be a short but important period.”

“It is also a scheme that can be extended in its duration if we are advised that it is necessary to extend the lockdown beyond January.”

“As the measures are ones that businesses are now used to, this support also adds a degree of certainty in cashflow terms at a time that these businesses will truly need it.”

“We also understand the difficulties landlords may find themselves in such as and in appreciation of the challenges being faced by many landlords, we are providing support in respect of rates concessions for voids properties and we continue to discuss workable solutions with the landlords association in respect of additional ways in which to support the property sector.”

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