Coronavirus – Visitor Accommodation Support Scheme

It is vital that Jersey enters the new economic environment post-Covid-19 with a visitor accommodation offering which remains attractive to business and leisure visitors as a key foundation of the Island’s visitor economy. As a result, the Visitor Accommodation Subsidy Scheme (the Scheme) is focused on preserving the quality and diversity of bed-stock.

The scheme will open on 23rd November 2020 and will cover the months of October 2020 to April 2021 inclusive.

Business eligibility for the scheme

To qualify for this scheme a business must be a Registered Tourist Accommodation Provider, meaning they are registered for the purpose of the Tourism (Jersey) Law 1948 as at 1 October 2020.

Scheme qualifying criteria

Applicants must show a 50% detriment comparing the total turnover in the last 12 months of operation (up to and including the month of claim) to the total 2019 turnover.

Support provided by the Scheme

The scheme will provide support of up to 80% of designated fixed costs paid by the business in cash in the month of the claim. The subsidy will be paid on a monthly basis in arrears.

Government guidance on the scheme is available here:

Visitor accommodation scheme guidance

How to prepare

Step 1: Read and understand the declarations

Conditions apply to this scheme that you MUST read and understand before making an application. If the business is incorporated you will need to hold a board meeting and provide a signed board resolution declaring your acceptance of the conditions. The guidance notes explain the scheme and the conditions in detail. You will find templates for the board resolutions here.

Step 2: Detriment

Calculate the detriment the business has suffered each month, for example

    1. turnover for the 12 months of 2019 = £100,000;
    2. turnover for the 12 months up to and including the month of the claim (November 2019 – October 2020) is £40,000;
    3. the difference is £60,000 which is a 60% detriment on 2019

As the detriment is over 50%, the business is eligible for the scheme.

Step 3: Fixed costs

Calculate the fixed costs (these are listed in the ‘Which fixed costs are eligible?’ section below) that have been paid out in the month that you are claiming for

Step 4: Subsidy

Calculate the subsidy per room and compare this to the fixed costs paid in the month. Whichever is the lower is the subsidy you will be entitled to claim. Details of the subsidy rate is in the ‘How to I calculate the subsidy available?’ section below.

 

Apply for Visitor Accommodation Support
How do I calculate detriment?

All income to the registered accommodation business applying should be included in the detriment calculation, including restaurant and bar takings where relevant.

Applicants must show a 50% detriment comparing the total turnover in the last 12 months of operation (up to and including the month of claim) to the total 2019 turnover.

  • Turnover is the total operating income including income from trading and any other sources of income that the business may have.
  • This includes (and is not limited to): the sale of products and services, commission receipts, business rental income, business bank interest or other business investment income, and payments received from business disruption insurance. Accruals accounting must be used for turnover calculations
  • Before the deduction of any allowable expenses

Detriment is calculated by comparing 2019 turnover to the turnover of the business in the last 12 months up to and including the month claimed for, for example

  • If turnover in 2019 was £100,000 and turnover in the last 12 months up to and including the month of claim is £40,000 then 60% detriment has been suffered; the detriment test is met.
  • If turnover for the last 12 months up to and including the month of claim was £60,000 then 40% detriment has been suffered; the detriment test is not met.
How to I calculate the subsidy available?

The business must meet the detriment test and then the monthly subsidy payable is indicated in the following table to a maximum of 80% of the fixed costs of the business:

Room subsidy Standard accommodation 4 or 5 star hotel
Amount per room/unit per night £10 £12.50
Minimum monthly subsidy £3,000 £3,000
Maximum monthly subsidy 80% of fixed costs 80% of fixed costs

 

As an example, the calculation of amount payable is:-

If 3* hotel has 50 rooms and the detriment test is met then amount payable for October (31 days) is:-

  • 50 (rooms) x £10 (subsidy for 3*) = £500 x 31 (days in October) = £15,500
  • If fixed costs for the month of October are £10,000 then the 80% cap operates to mean that; £8,000 is payable
  • If fixed costs for the month of October are £20,000 the 80% cap of fixed costs is not reached as 80% of £20,000 is £16,000; the full subsidy of £15,500 is payable.

If a 4* or 5* hotel has 100 rooms and the detriment test is met then the amount payable for October (31 days) is:-

  • 100 (rooms) x £12.50 (subsidy for 4&5*) = £1,250 x 31 (days in October) = £38,750
  • The 80% cap on fixed costs also applies.
Which fixed costs are eligible?

All fixed costs for the registered accommodation business applying should be included in the fixed cost calculation, including restaurant and bar costs where relevant. Designated fixed costs will include the following items, paid in the month of the claim (not accruals accounting), where they are relevant:

  • Rent payable on business premises where the landlord is not a party connected to the business*
  • Interest on mortgage payments; repayments of capital are not covered by the Scheme
  • Rent/leasing of equipment where the lessor is not a party connected to the business*
  • Maintenance of fixed and leased assets essential to the operation of the business
  • Utilities (gas, heating, electric, water, fuel, non-guest phones, internet etc.)
  • Parish rates
  • Software licences
  • Insurance
  • Essential subscriptions
  • Licences (liquor, TV, tourism etc.)
  • Audit/accounting fees
  • Refuse collection
  • Uniforms
  • Statutory staff training
  • Pest control
  • Group costs, where they are apportioned and charged to the business, if they are a cash cost to the head office company in that month and they are apportioned and charged in that month to operating businesses on a basis consistent with previous periods.

*parties connected to the business include parties connected by common shareholders, directors or common ultimate beneficial owners, a company in the same group of companies and persons who are directors or owners of the business

Ineligible costs

  • Salaries and other costs associated with the payment of staff are not included
  • Apportionment of a cost already incurred is not permitted
Businesses in a group structure

Where a registered accommodation provider is part of a larger group each registered provider should submit a claim; detriment will be assessed at individual business level not at group level.

Fixed costs (as included in the Designated Fixed Cost list) apportioned and charged by a head office company to the business where they are a cash cost to the head office company in that month and they are apportioned and charged in the month of claim on a basis consistent with previous periods, will be covered by the Scheme.

When can I apply?

The scheme will cover the period of October 2020 to April 2021, inclusive and will open to applicants on 23 November 2020.

Claim month Claim window
October 2020 23rd November – 31st December 2020
November 2020 1st -31st December 2020
December 2020 1st – 31st January 2021
January 2021 1st – 28th February 2021
February 2021 1st – 31st March 2021
March 2021 1st 30th April 2021
April 2021 1st – 31st May 2021
Other conditions

The following conditions apply and will be subject to a declaration in the application process:

  • Applications to the scheme will be made monthly, in monthly arrears, with subsequent applications providing a revalidation of the qualifying criteria
  • The monthly benefit under the scheme is capped at 80% of the fixed costs actually incurred in the month applied for
  • Signed accounts for the financial period ending in 2019 and 2020 (when available) must be provided on request
  • The subsidy is available regardless of whether the room is occupied
  • Applicants must make legally binding declarations as part of the application process to access the Scheme.
  • For corporate applicants an extract of a minute of a board meeting of the company evidencing that the company has considered and agreed to the rules of Scheme and has duly delegated authority to a director or other individual to make the declarations required under the Scheme on behalf of the company will be required.
  • For non-incorporated businesses a personal declaration by the registered business owner that they have considered the rules of the Scheme, agreeing to procure that the business will comply with the rules of the Scheme will be required. The business owner will make the additional declarations required under the rules of Scheme.
  • Failure to comply with the rules of the Scheme will result in all monies paid under the Scheme becoming immediately repayable and any further access to the Scheme will be denied.
  • Applicants must declare that they and their shareholders (where relevant) have considered all alternative options available and the subsidy is considered necessary to secure the continuity of the business
  • Applicants must declare that they meet the prevailing conditions of the Co-Funded Payroll scheme (where it is benefiting), and has paid all relevant taxes and social security contributions due to the States up to date (allowing for deferrals where permitted)
  • No dividends can be paid for a financial year within which a business participates in the scheme
  • The business must declare that it has reviewed and appropriately reduced director salaries (or owner’s renumeration where relevant) in the context of applying for a taxpayer funded subsidy and must not increase director salaries or owner’s remuneration during the life of the scheme
  • All funds paid under the Scheme to be repayable if the business closes or sells the property used as trading premises within 3 years of the business’ last payment under the scheme
  • All funds paid under the Scheme must be listed as a contingent liability in the accounts of the applicant business
  • The applicant business must declare that it is a going concern and not in immediate danger of insolvency, winding up or ceasing to trade on a permanent basis
  • The applicant business agrees to be audited to verify eligibility and compliance with the rules of Scheme, and to open its financial data to government auditors for that purpose
  • Beneficiaries under the scheme and amounts paid will be made public
  • The subsidy is not payable where the business is profitable for a month claimed for under the scheme, on an apportioned basis.[1] The scheme is designed to support businesses to survive (up to and including break-even) but should not underwrite profit

[1] For example, if the business claims a £100 subsidy, and makes £25 in profit, £25 would be repayable. If the business makes £0 profit, £0 is repayable.

For further questions about the scheme contact [email protected]