Economy

November aid: This is how businesses that close in lockdown can get money

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Dozens of companies in Germany have been affected by the lockdown again since Monday due to the corona pandemic. You have to close.

The federal government wants to provide an aid package worth ten billion euros for companies that have to close by order.

NewsABC.net explains how you can make money now if your business has to close:

Who is actually affected by the closure?

All companies, businesses, self-employed persons, associations and institutions that – and this is important – are prohibited from or have already been prohibited from conducting their business activities due to the state order are eligible to apply.

In the resolution of the minister-presidents of the federal states of October 28, the group of companies that have to close is specifically named:

  • Theaters, operas, concert halls and similar institutions,
  • Trade fairs, cinemas, amusement parks and providers of leisure activities (indoor and
    outside), amusement arcades, casinos, betting shops and the like
    Facilities,
  • Prostitution centers, brothels and similar establishments,
  • Leisure and amateur sports with the exception of individual sports
  • Swimming pools and fun pools, saunas and thermal baths,
  • Gyms and similar facilities.
  • Hotels, restaurants, bars, clubs, discos, pubs and similar establishments
  • Service companies in the field of body care such as cosmetic studios, massage practices, tattoo studios and similar businesses
  • Startups and young companies

How can I get money?

In addition to the existing aid from the federal and state governments, such as bridging aid, emergency aid or loans, the federal government has recently started offering the so-called extraordinary economic aid program.

Companies with up to 50 employees: Companies that have to shut down can receive a one-time flat fee this month: 75 percent of their sales from November 2020. According to the Federal Ministry of Finance, the amount is calculated from the average weekly sales of the previous month. The state money is paid for each ordered lockdown week. For companies founded after November 2019, sales for October 2020 are the benchmark.

Solo self-employed: You have the option to use the average previous year’s sales for 2019 as the reference frame for sales.

Companies with more than 50 employees: They also get up to 75 percent of the turnover from November 2019. The specific amount is determined on the basis of EU state aid guidelines. Details are currently being worked out by the Federal Ministry of Economics and Finance.

Companies that started their business activities after October 31, 2019 are allowed to use the 2020 monthly sales as comparable sales. You can optionally indicate your average turnover since the establishment.

I run a restaurant that has to close, but continues to sell take-away. Will I still get economic aid?

According to NewsABC.net, companies are allowed to keep up to 25 percent of the revenues they generate during the closure. That means: You are not taken into account. This also includes, for example, online courses offered by fitness or yoga studios.

Restaurant owners can still sell out of the home and income is not taken into account. With them, the comparable sales exclusively refer to sales that were made in the restaurant itself, i.e. on site. That means: From the 75 percent of the previous year’s sales, sales from this November with food outside the home will be deducted.

This should be possible without any problems because the out-of-home sale is subject to a different VAT and is therefore shown separately.

I have a retail business and am also indirectly affected by closings. Do I get the extraordinary economic aid too?

Actually, the current resolution does not provide for that. But it is also a fact: According to the Ministry of Economic Affairs, the number of passers-by has decreased by almost 40 percent in some of the city centers. If restaurants and other facilities now close in November, the number is likely to increase further, which means that the lockdown light in November also has an indirect impact on retail. According to information from NewsABC.net, the Ministry of Economy and Finance are working on a solution. What this looks like is still open.

Can I apply for economic aid and short-time work allowance at the same time?

No. The extraordinary economic aid will be offset against already granted state benefits for November, such as short-time work allowance or bridging aid, or with any later benefits from the bridging aid.

Where can I apply for the money?

The federal government’s plan is to enable the payment of a simplified application via the bridging aid platform. Upon request, the tax offices will issue a certificate of turnover in November 2019 based on the VAT payment.

Will there be payments on account?

Yes. Self-employed people get up to 5000 euros, companies up to 10,000 euros. The Federal Ministry of Economics and the funding database with all available resources of the Federal Ministry of Finance offer further information.

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