Restaurant support opened for applications

Restaurant support opened for applications on 5.6.2020. On the same day, the government submitted a proposal to the Finnish Parliament for general business cost support.

On Friday 5.6.2020 the long-awaited restaurant support for restaurants affected by the corona crisis was opened for applications. The restaurant support consists of two elements: remuneration for business restriction and support for re-employment. Application to the support happens in the KEHA Centre’s website.

In addition, the government submitted a proposal to the Finnish Parliament on Friday, 5.6.2020, for new business cost support aimed at reducing the number of bankruptcies in those industries that have suffered the most from the corona crisis. The new business cost support will replace the corona financing from the ELY Center and Business Finland, for which the application period closed on 8.6.2020 at 16:15. However, applications submitted to the ELY Center and Business Finland before the application period closed, will still be processed normally. The aim is to open the application for the new business cost support on the State Treasury’s website as soon as possible.

What does the restaurant support consist of, how much you can get it and how to apply for it?

The restaurant support consist of remuneration for business restriction and support for re-employment.

Remuneration for business restriction

The amount for remuneration for business restriction is 15% sales-based comparative figures up to a maximum of EUR 1 million and 5% for the amount exceeding the EUR 1 million. The maximum remuneration amount is EUR 500,000 and it is paid for the duration of the restriction obligation, which is 58 days. Remuneration is available for restaurants whose average sales during 4.4.-31.5.2020 have been lower compared to the average sales of either January-February 2020 or April-May 2019. The comparison is based to a time period when the average sales have been higher and the difference is the comparison figure of which the amount of the remuneration is calculated.

Generally, the remuneration for business restriction is paid automatically to the recipient without an application in so-called mass payment, in two instalments. The information for the remuneration payment is obtained on the basis of the April 2020 VAT return. The mass payment doesn’t concern companies whose main line of business is registered to be something other than catering activities. If your company is not covered by automatic payment you must apply for remuneration with an electronic form on the KEHA Centre’s website no later than 31.8.2020. You can check if your business is eligible for automatic payments here.

Support for re-employment

Support for re-employment can be applied for up to the number of full-time employees that the company has calculated to have in February 2020. Support for re-employment is intended to support the restoration of the number of employees in restaurants to pre-corona levels. The support amount is EUR 1 000 per employee and in certain conditions it can also be paid to temporary or subcontracted restaurants. The support can be paid to a company or corporation up to 800 people, with the condition that the employee is paid a total salary of at least EUR 2,500 during the three months following the end of the corona restrictions. Re-employment support also has a condition that the company receiving the support has not had financial difficulties before 31.12.2019. Re-employment support is applied for separately using an electronic form on the KEHA Centre’s website by 31.10.2020.

You can find more information about restaurant support and electronic support application forms here.

What is known about the general business cost support and its application process?

On Friday 5.6.2020, the government passed a proposal on new business cost support for companies affected by the coronavirus. The law is due to enter into force as soon as possible, after which the final criteria for business cost support will be confirmed. Once the law and related regulations are in effect, application for support can be opened. The support is applied for through the State Treasury’s website with an electronic form and the State Treasury informs separately when applications open. According to the preliminary information, the application for business cost support will end on 31.8.2020.

Who is eligible for the business cost support?

According to current information, companies as well as business associations and foundations from industries where the coronavirus has reduced the industry’s sales by at least 10%, can apply for and receive business cost support. These industries will be established by a separate decree after the enactment of the law. Industry data are meant to be collected from VAT returns. In addition to having to operate in such an industry, the company’s own turnover must have been decreased by 30% in order to be eligible for general business cost support. For a specific reason, a company operating in a industry other than that defined in the regulation can also be eligible. The comparison of the decrease in revenue is made by comparing the revenue for April-May 2020 with the average revenue for March-June 2019. For new companies, a comparison can be made with January-February 2020 revenue.

How is the business cost support calculated and how much support can one get?

The business cost support calculation is based on the company’s two-month fixed costs and wage costs and the support amount can be from EUR 2 000 to 500 000. The calculation of the support takes into account wage costs and fixed costs up to a maximum of half of the company’s turnover.

Subsidies previously received from the ELY Center and Business Finland do not prevent the application for business cost support, but 70% of these subsidies are taken into account in the calculation of business cost support, which reduces the amount of business cost support to be paid. Restaurant support and self-employment support also do not prevent the application for the business cost support, but these subsidies are fully taken into account as a reduction in business cost support.

More information on the subject can be found on the Government’s website.

Frequently asked questions about general business cost support and answers for the can be found on the websites of the Ministry of Economic Affairs and Employment and the State Treasury.

Iiro Säilä | Financial Advisor