December Aid, New Start Aid and Bridging Aid 3 announced
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December Aid, New Start Aid and Bridging Aid 3 announced

November Aid is to be followed by December Aid, and Bridging Aid 2 is to be followed by Bridging Aid 3. In addition, Restart Aid is to be provided. Here you receive an overview to December Aid, Restart Aid and Bridging Aid 3.

December Aid, Restart Aid and Bridging Aid 3: An overview

The November Aid can be applied for since November 25, 2020 and includes, as the name suggests, aid for the month of November due to the partial lockdown. The background is to help the companies, businesses, self-employed, associations and institutions affected by the closures through the crisis. This aid is now being extended, as the partial lockdown has also been extended until at least December. The November Aid will then become the December Aid.

The financial volume of the December Aid is expected to amount to approximately 4.5 billion euros per week of funding. Grants are again possible as extraordinary economic aid of up to 75 percent of the previous year’s reference turnover.

Since business activity is still not possible or only possible to a limited extent in many sectors, the responsible ministries have agreed to extend the Bridging Aid subsidy program until the end of June 2021. Bridging Aid 3 will therefore be set up for the period January 2021 to June 2021. Again, this will be a non-repayable direct subsidy.

Solo self-employed persons are to be supported with a flat-rate operating cost allowance of 5,000 euros. That means the new Restart Aid.

We have summarized the known details of the new aids for you in the following.

Application requirements for the December Aid

As with November Aid, companies that are directly affected by the temporary closures are eligible to apply for December Aid, as well as companies that are affected indirectly and indirectly via third parties.

The requirements in detail can be found in our publications on November Aid.

Applying for the December Aid

Applications can again be submitted by „examining third parties“ via the official portal Solo self-employed persons who do not apply for more than 5,000 euros in funding and have not applied for Bridging Aid or November Aid can submit applications directly with their Elster certificate. Here, too, everything is as usual.

The possibility to apply is currently being prepared and programmed. It is not yet possible to make a statement as to when corresponding applications can be made.

December Aid: amount of the grants

As with the November Aid, grants are also awarded in the amount of 75 percent of the average weekly turnover from December 2019. Solo self-employed persons can alternatively indicate the average monthly turnover in 2019. Advance payments of up to EUR 10,000 (equity benefit) are possible.

European state aid law currently only permits funding of currently up to one million euros without concrete evidence of damage. The Federal Government is in agreement with the EU Commission on this.

The December Aid will only be granted pro rata for the number of days of closure in December 2020. This regulation also applies accordingly to the November Aid.

Bridging aid 2 for the month of December, the short-time working allowance reimbursed by the employment agency plus reimbursed social security contributions as well as reimbursements from private business interruption or business interruption insurance policies are counted towards December Aid.

Bridging Aid 3 and the requirements for applying for it

With the Bridging Aid 3 enterprises with up to 500 million euro annual turnover are entitled to apply. This means that the aid is no longer limited to small or medium-sized companies. The companies concerned must have their headquarters and be registered in Germany and must directly or indirectly suffer considerable losses of turnover due to the Corona crisis.

Requirements in detail are:

  • Turnover decrease of at least 50 percent in two consecutive months (April to December 2020) compared to the same period of the previous year or
  • Average revenue decrease in the period April to December 2020 by 30 percent compared to the same period of the previous year or
  • Turnover decrease in November 2020 and December 2020 respectively by 40 percent compared to the same months of the previous year without the possibility to apply for November/December Aid.

Applying for Bridging Aid 3

The application for the Bridging Aid 3 proceeds like already with the Bridging Aid 2 and Bridging Aid 1 over tax advisors, accoutants, sworn auditors and attorneys as examining third.

After an accreditation the application portal is used for this purpose. We are still accredited there.

Application is expected to be possible from mid-January 2021.

Amount of aid for Bridging Aid 3

The maximum amount of funding was increased from 50,000 euros per month for the Bridging Aid 2 to 200,000 euros per month for the Bridging Aid 3.

As with Bridging Aid 2, any fixed costs incurred will be reimbursed. We have already reported on this in detail on several occasions. The fixed costs are reimbursed in stages of up to 90 percent, with a minimum decrease in monthly sales of more than 30 percent.

However, it is encouraging that the definition of fixed costs has been expanded:

Now also structural modernization, renovation or rebuilding measures for hygiene measures up to 20,000 euro are applicable.

Marketing and advertising costs can also be recognized up to a maximum of the amount incurred in 2019.

Depreciation of assets is recognized up to 50 percent as eligible costs.

Special features for the culture and event industry

In the case of Bridging Aid 3, both internal and external default costs can be claimed for the period March to December 2020.

Special features for the travel industry

The special fixed cost regulation for the travel industry will be significantly expanded. The absence or repayment of commissions for travel agencies or of comparable margins for tour operators due to corona-related cancellations will remain eligible. This also applies to Bridging Aids 1 and 2, as in the past.

But: The limitation on package tours, which was drawn in so far, will be abolished! Now also short term bookings are considered.

In addition to the promotion of commissions or margins in the first half of 2021, the travel industry is also eligible for subsidies for external as well as internal default costs for the period March to December 2020, which are represented by an increased flat rate for personnel costs.

Details will certainly be announced later.

Restart Aid for Solo Self-employed

Solo self-employed persons, i.e. sole traders or freelancers without employees, are still in a very special situation. So far these entrepreneurs could profit only very little from the Bridging Aids, since the fixed costs are usually very small and could be subsidized thus little.

However, a good opportunity has now been created for these solo freelancers in particular. Alternatively to the fixed cost refund these solo independent ones may request now a unique operating cost refund of 25 per cent of the comparison conversion. This is the newly created so-called Restart Aid. The one-off contribution may not exceed the amount of 5,000 euros as a subsidy.

Whether individual federal states, such as North Rhine-Westphalia, will again grant an entrepreneurial wage or Bridging Aid plus for solo self-employed persons and sole proprietors is not yet known to us.

Our assessment

Due to the extended lockdown and the further progress of the Corona crisis, it is urgently necessary to provide further support to the companies. The political announcements have now been followed up with the announcement of the new aid. This is also a good thing.

But as always, the devil is in the details. We had already commented critically on the implementation of November Aid. Also with the new aid must be waited for first of all, how the conversion takes place, when applications can be made, when these are processed by the authorities, when the aid is disbursed. It is to be feared that it will also be a long time with the new aid. In addition, as with all other forms of aid, there will again be administratively complicated feedback procedures and repayment measures. This should always be borne in mind.

We are at your disposal as for all other aids. Just get in touch with us.

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Steuerberater in Düsseldorf, Lars Rinkewitz
Lars Rinkewitz
Tel.: +49 2173-399 47 289
Steuerberater in Düsseldorf