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Assistance available for Victorian Hospitality Businesses Impacted by COVID-19 restrictions

The Victorian Government has recently announced three distinct grant assistance programs for Victorian hospitality businesses impacted by the restrictions implemented to help slow the spread of COVID-19.

 

We will discuss each program below, and note that all three programs are now open to take grant applications.

 


1 - The (Melbourne) CBD Small Hospitality Grant

The CBD Small Hospitality Grant provides additional support to small and medium hospitality businesses in Melbourne CBD that have previously received a grant from the Business Support Fund – Expansion Program (and we have explained this program in a previous Tax Alert).

 

Eligible businesses will be provided with a one-off grant, to help with the continued operation of their business, of either:

  • $5,000 grant - for businesses with a food service seating capacity in the CBD of 11 to 100 seats; or
  • $15,000 grant - for businesses with a food service seating capacity in the CBD of 101 or more seats.

 

What are the eligibility requirements for this grant? 

To be eligible for a one-off grant under this program, businesses must:

  • Be a recipient of a Business Support Fund – Expansion Program grant (and may have received an invitation to apply for a CBD Small Business Hospitality Grant).
  • Operate a business with an address located in the Melbourne CBD, including the following postcodes; 3000 (Melbourne), 3005 (World Trade Centre), 3006 (Southbank) and 3008 (Docklands).
  • Operate a restaurant, cafe, pub, bar, club, reception centre, coffee and dessert outlet or takeaway food venue with food service seating capacity of 11 seats or more.
  • Hold a Class 2 or 3 Service Sector Certificate of Registration under the Food Act 1984 (Vic).
  • Not have received funding assistance through the Night-time Economy Business Support Initiative (explained below) or the Victorian Live Music Venues Program (explained below).

How can the funding be used? 

The grant funds may be used for:

  • Meeting business costs, including utilities, salaries or rent;
  • Seeking financial, legal or other advice to support business continuity planning;
  • Developing the business through marketing and communications activities; and/or
  • Any other supporting activities related to the operation of the business.

 

What evidence will you need to provide with an application?

All applicants will be required to provide:

  • The address of all Melbourne CBD hospitality premises/venues operated by their business; and
  • The seating capacity of their Melbourne CBD hospitality premises (where "seating capacity" is the sum of the food service indoor and/or outdoor seating).

This information will be verified against the Certificate(s) of Registration and other information held by the City of Melbourne.

 

How do you apply?

Recipients of Business Support Fund - Expansion Program grants will be invited to apply and, when they are, will be required to submit an application online via the Apply Now button - click here.

All questions in the application need to be completed to ensure timely assessment and grant payment.


2 - The Hospitality Business Grant

The Hospitality Business Grant program supports food service businesses that have been affected by the return to Stage 3 and Stage 4 restrictions to help slow the spread of COVID-19 in Victoria.

 

Eligible food service businesses may be able to access this grant and the amount available is determined using a three-tier regime, as follows:

  • a one-off $25,000 grant - for business costs to support their continued operation; and
  • an additional $5,000 grant - available for each additional premises located within metropolitan Melbourne or Mitchell Shire (capped at a total of $20,000), which is a maximum of five premises; and
  • an additional $20,000 grant - will also be available to eligible businesses operating in a CBD location with the postcodes 3000 (Melbourne), 3005 (World Trade Centre), 3006 (Southbank) and 3008 (Docklands).

 

What are the eligibility requirements for this grant?

To be eligible for this grant, your business must satisfy all of the following conditions, including:

  • Operate a business with premises located in Victoria;
  • Operate a restaurant, cafe, pub, bar, club, reception centre, coffee and dessert outlet or takeaway food venue that serves patrons and hold a Class 2 or Class 3 Service Sector – Certificate of Registration under the Victorian Food Act 1984 (note, the Certificate must be valid as at 30 June 2020);
  • Have an annual payroll of greater than $3 million and lower than $10 million in 2019-20;
  • Be registered for GST on 30 June 2020;
  • Hold an ABN and have held that ABN at 30 June 2020 (note, this information needs to be up-to-date and current at the time of application); and
  • Be registered with the responsible Federal or State regulator (and your business will be subject to a risk assessment which verifies business details provided with either; ASIC, ACNC, Australian Business Register, Consumer Affairs Victoria, Local Councils, Department of Health and Human Services and/or other applicable regulator).

 

We must note businesses that have received funding under the Victorian Live Music Venues Program (explained below) and/or the Business Support Fund - Expansion Program (explained in a previous Tax Alert) are not eligible for funding through this program. 

 

What evidence will you need to provide with an application?

You must provide evidence to certify that you meet all the eligibility criteria detailed above.

For businesses with more than one venue, you are required to provide evidence confirming the following details:

  • the locations of the premises where you conduct your business operations (which should be detailed on your most recent Certificate(s) of Registration); and
  • an organisational structure of your business (including subsidiaries and holding companies related to the business).

 

How can the funding be used?

The grant funds may be used for:

  • Meeting business costs, including utilities, salaries or rent;
  • Seeking financial, legal or other advice to support business continuity planning;
  • Developing the business through marketing and communications activities; and/or
  • Any other supporting activities related to the operation of the business.

 

How do you apply?

Applicants are required to submit an application online via the Apply Now button – click here

All questions in the application need to be completed to ensure timely assessment and grant payment.

We understand that the Department of Jobs, Precincts and Regions will endeavour to notify all applicants on the outcome of their submitted application within 10 business days.


3 - The Night-time Economy Business Support Initiative

This program/initiative is structured differently to the previous two grant programs (explained above), as the Night-time Business Economy Support Initiative will provide commercial rental relief for licensed businesses impacted by the COVID-19 pandemic who were unable to access relief under the Commercial Tenancies Relief Scheme

The support under this initiative is made available through the Victorian Government's Business Support Fund, and is available to licensed venues across Victoria with an annual turnover of up to $50 million that operate as part of a group.

 

This initiative will also provide access to free mediation services to help eligible tenant businesses reach agreements with their landlords on rent relief during the COVID-19 pandemic.


What support is available?

This initiative provides eligible businesses with the following three elements of support, including:

  • Reimbursement of up to $20,000 per business group - for expenses incurred in obtaining specialist business and tenancy advice since 29 March 2020;
  • Free mediation services - to help tenants and landlords reach a fair and proportionate commercial outcome on rental payments; and
  • Relief for commercial rent hardship of up to $150,000 - per business group where it can be shown that the business has sought to negotiate in good faith with the landlord with no result.

Applications will be accepted until 1 June 2020 or until available funding has been committed.

 

What are the eligibility requirements for this initiative?

 

To be eligible for support under the Night-time Economy Business Support Initiative applicants must satisfy all of the following conditions, including:

  • Operate licensed pubs, clubs or restaurants on tenanted premises under a general, full club or on-premises liquor licence as part of a group;
  • Employ people;
  • Have an annual turnover of less than $50 million at each individual premises operating within the group;
  • Hold an ABN and have held that ABN at 16 March 2020 (ie. the date Victoria's State of Emergency was declared);
  • Were engaged in carrying out the operation of the business at the tenanted premises in the State of Victoria on 16 March 2020;
  • Have had a reduction in turnover of at least 30% at one or more individual premises operating within the group since 16 March 2020; and
  • Do not qualify for the Victorian Government's Commercial Tenancy Relief Scheme under the COVID-19 Omnibus (Emergency Measures) (Commercial Leases and Licences) Regulations 2020 because the business is part of a group that has an aggregated annual turnover greater than $50 million (in the past financial year).

We understand that businesses that are not registered in Victoria but operate more than one premises in Victoria may also apply for support, but these applications will be reviewed on a case-by-case basis.

 

What specialist business and tenancy advice expenses can be claimed?

The types of specialist business and tenancy advice that can be claimed as expenses under this initiative are:

  • Basic professional services (ie. accounting, property, financial, tax and legal business requirements and consultancies); and
  • Costs associated with licencing and lease documentation and financing fees.


How can the commercial rent relief funding be used?

The commercial rent relief funding is to be used for meeting lease-related business costs, including rent, utilities, outgoings and other property-related expenses.

 

Evidence of eligibility and compliance

All applicants must certify in writing that they meet the eligibility criteria above.

Applicants may be subject to an audit review, for a period of four years after funding has been approved, by the Victorian Government (or its representatives) and you may be required to produce evidence, such as financial reports to demonstrate impact and/or allocation and use of funds.

 

If any information in the application is found to be false or misleading, or the grant money is not applied for the eligible purposes as set out in this initiative, the grant will be repayable on demand.

 

What is the application process?

This initiative has a distinct two-step application process:

  • Firstly, your business group must register its interest online via the Register Your Interest button – click here  - and after receiving your registration, a Department of Jobs, Precincts and Regions staff member will contact you to discuss your circumstance.
  • Secondly, you will be invited to submit a full application (by using a link to an online form, which will be provided directly to you), and you must complete all questions to ensure a timely assessment of your eligibility.

 

You will need to provide all of the following with your application:

  • A copy of financial accounts identifying monthly business turnover since March 2019;
  • A copy of the group financial statement for the last financial year showing a turnover of greater than $50 million;
  • A copy of the most recent Business Activity Statement (BAS);
  • A copy of the Liquor Licence for each of the premises applicable as at 16 March 2020;
  • A copy of the Commercial Tenancy Agreement applicable at or immediately prior to 16 March 2020, and any variation(s) to the Rental Payment Schedule agreed with the landlord of each of the licensed premises since 16 March 2020; and
  • Any other materials that support your claim.



Please do not hesitate to contact your Lowe Lippmann Relationship Partner if you wish to discuss any of these matters further.