Support for businesses providing visitor accommodation

The grant is a fixed monthly payment for each bedroom or self-catering unit included in the claim. The same monthly rates apply to both phase 1 and phase 2 of the scheme.

The grant is payable at the following amounts each month:

Grant rates

The payroll co-funding offered under this scheme is available at either 80% of minimum wage, or 100% of minimum wage, according to the table below:

Payroll co-funding rates

The qualifying turnover thresholds that apply to the general Payroll Co-funding scheme announced in January, and which is available to businesses outside of this sector, do not apply to this scheme.

The same eligibility criteria apply for both the grant and payroll co-funding options under this scheme. Although initial eligibility is assessed as part of the application process, it will be reassessed periodically during the term of the scheme.

Eligible businesses

Businesses are considered eligible if all three of these conditions apply when the claim is assessed. Eligibility will be separately assessed for phase 1 and phase 2.

1. The business is expecting to incur a total loss over the 12 months of the scheme term. For phase 1, this is the year ending 31st March 2021. For phase 2, it is the year ending 31st March 2022.  For this purpose, the forecast profit or loss should include any mitigating actions they plan to take, such as reducing discretionary spend and managing staff numbers.

2. The business can demonstrate it was commercially viable prior to the Covid-19 pandemic. Businesses that did not show profits in their last two annual financial statements prior to 31st March 2020 need to prove a realistic expectation of returning to profitability.

3. The business is planning to re-open when Covid related restrictions permit and expects to be commercially viable. This will normally mean that the business is currently accepting advance bookings, and holding deposits against future bookings.

Further guidance

Government cannot be expected to utilise taxpayers’ money to make good all expected losses that businesses will incur during this difficult period.  Many businesses will have reserves available that have been built up over a strong historic trading record and this is the type of trading period when these reserves will require to be called upon. It is recognised that some level of reserves will be required to be carried into future trading periods to provide businesses with essential resilience and source of ongoing investment.

While businesses are not excluded from applying for support irrespective of the value of reserves available, the expectation is that those businesses with substantial reserves or owners with extensive personal wealth will not need to rely on taxpayer funded support under this scheme.

Standard support

Eligible businesses will qualify for standard support where:

1. They are expecting to make a loss in the 12 months of the scheme Term. For phase 1 this is the 12 months to 31st March 2021, and for phase 2 this is the 12 months to 2022. And:

2. This level of support will be sufficient for the business to be able to resume normal operations at the end of the scheme Term. 

Please note the grant payment is not expected to cover all losses. Businesses claiming standard support may also need to rely on their reserves.

Enhanced support

Eligible businesses will qualify for enhanced support where:

1. They are expecting to make a loss in the 12 months of the scheme Term. And:

2. The standard support is insufficient for the business to be able to resume normal operations at the end of the scheme Term.  This will normally mean that they are unable to meet all expenses as they fall due after taking mitigating actions such as minimising spend on non-critical staff as well as using available reserves held within the business. The onus will be on businesses to clearly demonstrate this higher funding requirement with the likelihood of further documentation and information being required. Relatively few businesses are expected to qualify for enhanced support and those that claim will undergo additional scrutiny to ensure that this increased level of support is justified.

Room numbers and categorisation

Businesses are permitted to claim a grant in respect of those bedrooms or units that are available for use in the grant period, subject to this being no more than the number of rooms already registered in each category as visitor accommodation with the States of Guernsey. For this purpose, bedrooms or self-catering units that are closed for reasons solely related to Covid-19 restrictions, are treated as available for use, and a claim permitted.

Viable businesses should be open

Where businesses are able to trade whilst complying with Public Health guidance, and the impact of the covid pandemic has not caused the business to be temporarily commercially unviable, then the business is expected to be open and trading to the fullest practical extent. Businesses that do not open in these circumstances will cease to be eligible for support.

New Businesses

Businesses that commenced trading for the first time after the start of the pandemic do not meet the normal eligibility criteria of this scheme as they cannot demonstrate that they were commercially viable prior to the pandemic. Moreover, such businesses are expected to have made some allowance for the impact of the pandemic in their initial business plan. For this reason, requests from these businesses for support will be assessed on a case by case basis.

Scheme Terms and support periods

Phase 1 of this scheme provides monthly support payments from October 2020 to March 2021 inclusive. However, the scheme Term, which is used to assess eligibility and support levels, is the 12 months to 31st March 2021.

Phase 2 of this scheme is expected to provide monthly support payments from April 2021 to March 2022 inclusive. The scheme Term is the 12 months to 31st March 2022.

While support under Phase 2 is expected to be available for a period of 12 months to end March 2022, the States reserves the right to make changes to the terms of the scheme in the event that trading conditions significantly improve for the sector.

Use of support payments

Although claimants are free to use the support scheme to fund their businesses operations in the way they see fit, it is expected that the scheme will enable the retention of critical employees throughout the period. Claimants with significant rent costs may still need to negotiate terms with their landlord for a deferral or waiver of costs. Those with significant mortgage interest costs may also need to discuss options with their bank.

Capping of support

The total support that a business can claim will be capped at the actual loss incurred in the 12 months of the scheme Term. This means that business support payments will not be allowed to contribute to a profit making position. Should these payments result in a profit, the cap will apply and support payments will be suspended. For example, where a business positively exceeds their forecasted position and achieves a profit in the 12 month period, after including support income, they will be asked to return the excess proportion of support payments. The principles for suspending payments and requesting a return of payments are set out in more detail in the document at the foot of this page “Support Caps and Clawbacks”.

Insurance proceeds

Businesses are expected to pursue insurance claims, provide relevant information and include the expected proceeds of these in their forecast.

Owner’s salary

Businesses are permitted to include within their profit forecast a reasonable salary cost for any operational role performed by the business owner. In these cases the salary cost should be shown on the line set aside for this in the profit forecast template, and the comments box on the same template used to explain how the amount was determined.  Like all other business overheads, this will be assessed for consistency against previous accounting periods.

Glamping units and Campsites

There is no standard support rate for businesses operating Glamping units, but they may still apply for support under this scheme. Eligibility will be assessed on the normal criteria, but the value of support will be assessed on a case by case basis. For this purpose Glamping units will normally be considered as semi rigid structures such as safari cottages, pods and cabins. Tents, yurts, tepees and pitches in campsites are not normally included in this scheme because their costs differ so significantly from other visitor accommodation. However, exceptional applications will be considered on a case by case basis.

Businesses are asked to self-assess against the eligibility criteria set out in this guidance on their initial claim form. To support this self-assessment, business are also asked to complete a forecast template to demonstrate their profit or loss forecast for the 12 months of the scheme Term. Businesses are also asked to provide Annual Financial Statements for the last two available years.

It is acknowledged that this information will be commercially sensitive. Access to profit forecasts and Annual Financial Statements will be limited to those people responsible for administering the accommodation grant claims process.

The States of Guernsey will review these self-assessments, and in particular will assess the reasonableness of forecasts by comparing them to the previous trading record. Those business who have claimed support at the enhanced rate will be reviewed for compliance with the additional eligibility requirements of this rate.

There may be cases where the support entitlement set out in this scheme is deemed insufficient for a business thereby putting the future of the business at critical risk. In these cases claimants should contact the States of Guernsey using the details provided below to discuss their concerns.

Existing Phase 1 claimants

Those businesses that have already been assessed as eligible for support under phase 1 do not need to submit a claim for phase 2. These businesses will be asked to agree the updated Key Terms and Declarations and then will be automatically enrolled in phase 2, subject to their continuing to meet eligibility and reporting requirements.

In these cases, the same level of standard or enhanced support that applied in phase 1 will apply to phase 2 by default. However, claimants may contact Business Support to request a reassessment of their claim if they believe their situation is materially different and now meets the criteria for amended support within the terms of the scheme. Claimants wishing to seek assessment for an upgrade are asked to review the eligibility criteria for enhanced support, and prepare a cash flow forecast using a template available from Business Support before making this request. Requests for an upgrade to support should be submitted before 31st March.

Existing Phase 1 claimants will be able to switch from the Payroll Co-funding option to the grant support option or vice versa at the commencement of the new scheme on 1st April.  As at present, no switching will be allowed after support payments have started in this phase. Please contact Business Support before 1st April if a switch is the preferred option.

Payments to some businesses under phase 1 of this scheme are currently suspended, on the grounds that the support paid so far covers their total losses forecast for the year to 31st March 2021. Such businesses will still qualify for automatic enrolment in phase 2. The calculation of total support paid will be reset on the 1st April, and in many cases payments will resume. They will however be suspended again at such time as payments under phase 2 cover losses forecast for the 12 months to 31st March 2022.

Those businesses that are auto-enrolled into phase 2 will not have provided a profit forecast for the 12 months to 31st March 2022 at the time of enrolment. In these cases, the last provided forecast for the 12 months to 31st March 2021 will be taken as the best estimate of forecast profits for the year to 31st March 2022, until such time as a forecast for the year to 31st March 2022 has been provided in a normal quarterly trading update.

New claimants

Those businesses that have not previously claimed support under phase 1, may submit a claim for support under phase 2, by completion of the on-line claim form. Claimants will be asked to upload a completed profit forecast template which should cover the 12 months to 31st March 2022, as well as their last two available annual accounts. A blank template for completion with a profit forecast is available at the foot of this page.

Claims submitted after 15th March will automatically be treated as a claim for phase 2. Businesses that wish to submit a claim for phase 2 before this date are free to do so, but should email Business Support to confirm that their claim is for support under phase 2 rather than phase 1.

Some Businesses may opt out

Some businesses which derive the majority of their revenue from bar and restaurant activities in normal years may consider themselves better supported by the general Payroll Co-funding scheme. These businesses may opt out of phase 2 of the Visitor Accommodation Support scheme to enable claims within the general Payroll Co-funding support scheme.  However, such an election will only be effective from 1st April and the election must be made before any support is received under phase 2. Once a business has opted out it will not be possible to opt back in.

Businesses should bear in mind that the general Payroll Co-funding support scheme is likely to be available for a much shorter period than phase 2 of the Visitor Accommodation Support scheme. To qualify for this option, businesses must demonstrate that they generate over 50% of their normal turnover from non-letting custom in normal years.

All payments will be subject to ongoing eligibility and the timely provision of required financial updates. Any delays, non-receipt or non-compliance with the information requirements will result in support payments being suspended.

Grant payments

Businesses that elect to receive grant payments will be paid monthly without the need to submit a further claim, though there is a requirement to provide quarterly trading updates.

Payroll co-funding payments

Businesses that elect to receive Payroll Co-funding support will be asked to submit a monthly payroll claim through the normal process for payroll co-funding, in addition to quarterly trading updates. Claimants will be referred to the instructions for this once they have confirmed their election for this support. 

Quarterly trading updates

In addition to the initial claim, all businesses will be required to provide quarterly trading results together with trading forecasts for the period ahead by completion of a template provided by Business Support. The first quarterly trading update for phase 2 of the scheme will be requested in July, and will cover actual trading results for the 3 months to 30th June, and a forecast for the remaining months to 31st March 2022. These trading updates will enable ongoing monitoring of profitability across the sector as well as establish continued eligibility.

The States reserves the right to request additional information where necessary to validate claims and to suspend support payments or request their return if the validity of the claim cannot be confirmed. Further, it will be necessary to request the return of support payments if actual trading results show a profit for the 12 months end 31st March 2021, despite a loss being forecast for this period in the initial claim.  The States reserves the right to deduct the value of such payments made under phase 1 from support due to be paid in phase 2. The States also reserves the right to recover such payments from amounts due under this scheme to Affiliate businesses of the claimant.

If you have any questions please email business.support@gov.gg and include “accommodation support” in the subject line.  Please do not email any documents to this address unless asked to do so. Alternately please call 220003. Lines are open Monday to Friday 9.00 to 5.00pm.