Current overview of the Corona aids
Today we would like to give you a short update on the ongoing and future Corona aid.
Table of contents
Current status of November aid
Applications have been possible since 25.11. and will be possible for the last time on 31.1.2021.
Eligibility to apply for November aid
Companies, businesses, self-employed persons, associations and institutions directly affected by the temporary closures due to the ordinances of 28.10.2020 and indirectly affected companies are eligible to apply. Accommodation establishments and event venues count as directly affected companies. Indirectly affected companies are companies that demonstrably and regularly generate 80 percent of their turnover with companies directly affected by the lockdown measures. Companies that regularly generate 80% of their sales through deliveries and services on behalf of companies directly affected by the measures via third parties (e.g. event agencies) are also eligible to apply.
Promotion of November aid
The economic aid is paid out as a one-off lump sum. The reference point is the average weekly turnover in November 2019. The reimbursement amounts to 75% of the corresponding turnover. For companies founded after November 2019, the comparison with turnover in October 2020 is used. As an alternative to the weekly turnover in November 2019, solo self-employed persons can use the average weekly turnover in 2019 as a basis for comparison.
The economic aid is granted up to an upper limit of 1 million euros. The extraordinary economic aid granted will be offset against any state benefits already received for the period November 2020, such as short-time working allowance or bridging aid, or against any later benefits from the bridging aid.
If sales are generated in November despite the general closure, these will not be offset up to 25 percent of the comparative turnover. A special rule applies to restaurants if they offer food for sale outside the home.
Procedure for payment on account and application
The Federal Ministry of Economics and the Federal Ministry of Finance have agreed on the advance payment procedure for November aid:
- Solo self-employed persons receive an advance payment of up to 5,000 euros; other companies receive up to 10,000 euros.
- The first payments on account are to be made from the end of November 2020.
- The procedure for the regular payment of November aid is being prepared and finalized in parallel so that it can be started immediately after the interim payments.
Solo self-employed persons who have not yet applied for bridging assistance can apply in their own name (without a verifying third party) for up to €5,000. An ELSTER certificate is required for the application.
The first payments on account are already scheduled for the end of November 2020.
We offer you an Excel tool for download that you can use to check whether you are eligible for November aid:
Bridging aid phase II (funding period September to December 2020)
Applications have been possible since 21.10. and will be possible for the last time on 31.12.2020.
Eligibility to apply for bridging assistance phase II
Companies and organizations from all sectors are eligible to apply. Self-employed individuals and freelancers can also submit an application if they meet the program requirements. The same applies to non-profit companies and organizations. In phase 2, too, applications for assistance can only be submitted via a tax consultant, auditor, sworn accountant or tax advising lawyer.
Eligibility requirements: Decline in sales in the period April to August 2020
A prerequisite for funding is that the eligible applicant has had to permanently cease all or a significant part of its business activities as a result of the coronavirus crisis.
This is fulfilled if the turnover
- has fallen by at least 50 % in two consecutive months in the period from April to August 2020 compared to the same months of the previous year or
- fell by an average of at least 30 % per month over the same period.
If sales fall by less than 30 %, no bridging aid will be paid out.
2.3 Funding ratio in the funding period September to December 2020
The amount of the bridging aid depends on the amount of the drop in turnover in the month of support compared to the same month in the previous year. The support is provided in the form of reimbursement of the company's fixed costs.
Specifically, the following fixed costs are reimbursed:
| Decline in sales in the month of extraction compared to the same month of the previous year | Reimbursement as bridging aid |
| more than 70% | 90% (previously in phase 1: 80%) |
| between 50 and 70 % | 60% (previously in phase 1: 50%) |
| between 30 and under 50% (previously at least 40% in phase 1) | 40% |
Companies whose business activities have come to an almost complete standstill will be supported with higher funding rates in the second phase of the bridging aid. This applies, for example, to the event and show business. In the first phase, up to 80% of fixed costs were reimbursed; this is now being increased to up to 90%. The funding rates for companies with less serious losses in turnover are also increasing. At the same time, the threshold above which bridging aid is paid out is being lowered.
Assessment basis: Eligible fixed costs
Eligible fixed costs are among others:- Rents and leases,
- Rental of vehicles and machines,
- Financing costs,
- Expenses for necessary maintenance, servicing or storage of fixed assets and rented and leased assets,
- Expenses for electricity, water, heating, cleaning and hygiene measures
- Insurance, subscriptions and other fixed expenses,
- Costs for trainees,
Personnel expenses for staff who cannot be put on short-time work can be supported by a lump sum of the eligible fixed costs. This lump sum will be doubled in phase II: in order to take account of the sometimes high personnel costs required to maintain operations, the lump sum for personnel costs will increase to 20% of eligible fixed operating costs in phase 2. Previously it was a flat rate of 10 percent. This is intended to help those companies in particular that continue to employ staff.
For further details on the second funding phase, see FAQ on "Corona bridging aid for small and medium-sized enterprises"
We offer you an Excel tool to download, which you can use to check whether you are eligible for Phase II bridging assistance:
Bridging aid phase III (funding months January to June 2021)
Concretization has taken place, an application will be possible from January 2021.
Due to the ongoing Covid 19 pandemic and the associated temporary closures for certain sectors, there will be a third phase of bridging aid for the period January 2021 to June 2021 (= bridging aid III).
There are to be further improvements for Phase III, e.g. with regard to the eligibility of maintenance, modernization measures and depreciation. Instead of the current maximum of EUR 50,000 per month, up to a maximum of EUR 200,000 in operating cost reimbursements will be possible in future.
Bridging aid III, which will include the restart aid, is to apply from 01.01.2021. Due to the necessary technical programming and coordination with the federal states and the EU Commission, applications can be submitted a few weeks after the start of the program in the new year. The details of the application process will probably be finalized in the coming weeks.
Restart aid for solo self-employed
Bridging Aid III is intended to bring improvements for solo self-employed persons. In future, those affected, e.g. from the arts and culture sector, will be able to receive a one-off lump sum for operating costs for the period from December to the end of June 2021 as a taxable subsidy. For this target group, the previous reimbursement of fixed costs will be supplemented by a one-off lump sum for operating costs (so-called "restart aid"). The new start aid amounts to a one-off 25% of the reference turnover, up to a maximum of EUR 5,000. The reference turnover is based on the average monthly turnover in 2019.
Solo self-employed persons who cannot otherwise claim fixed costs under Bridging Assistance III and who have generated at least 51% of their income from self-employment in the reference period (normally 2019) are eligible to apply. The restart aid is to be paid out as an advance, even if the actual loss of turnover during the period from December 2020 to June 2021 is not yet known when the application is submitted. If, contrary to initial expectations, turnover during the term exceeds 50% of the seven-month reference turnover, the advance payments must be repaid on a pro rata basis. At the end of the funding period, the beneficiaries must prepare a final statement of account by means of a self-audit.
Restart assistance does not count towards basic security benefits and similar benefits due to its earmarking.
Help from a tax advisor for your corona aid
Do you have questions or problems when applying for November aid, bridging aid or other corona aid? Do you need active support from experienced tax advisors? We can help you quickly, competently and throughout Germany. Give us a call or write to us using the contact form:
Rudolf-Diesel-Str. 5, 65760 Eschborn near Frankfurt
2 comments
Franz-Josef Englmaier
All the corona aid should finally arrive. This is a huge disaster, especially for us showmen. The coronavirus pandemic is doing incredible damage to our economy and I believe that this damage will have a greater impact in the coming years than anything to do with health.
Thank you, however, for this overview of the current assistance. I am curious to see what will come of it and whether I will be allowed to work and earn money again in 2021.
Greetings from a (economically) dying showman.
Fritz
You showmen are really not to be envied. Thank goodness my industry has not yet been affected by this lockdown and the measures taken. But sooner or later, the trade will probably also suffer losses if there are simply no more investment funds available...
I'm also curious to see where all this will lead. The aid is just a drop in the ocean and yet someone has to recoup these billions and billions...