Additional support for readjustment based on loss of turnover in Sweden - application is open
Updated news March 3 2021
Support for readjustment for businesses affected by lower net sales as a result of the pandemic in Sweden. The support is similar to the previous transition support but now calculated a little differently. The maximum amount is 97 million and applies to the total of the three periods. Companies that are entitled to support receive compensation for between 70-90% of their uncovered fixed costs. The conditions are different for the periods, the support periods are:
- August-October 2020
- November-December 2020
- January-February 2021
The support is given to companies where net sales declined compared with the corresponding months in 2019. The Swedish Tax Agency has opened the applications for all three periods and you can apply until April 30, 2021. Each period is applied for separately.
Are you entitled to support for readjustment?
The Swedish tax Agency has developed page where you easily can see if you qualify for readjustment support.
Updated news 20 Jan 2021
Proposal for extended readjustment support for companies and strengthened support for smaller companies. The proposal is to extend for the period November-December 2020 and then an additional amending budget for January-February 2021.
The enhanced level applies to small businesses with fewer than 50 employees that do not have a balance sheet or turnover exceeding 100 million per year (EUR 10 million). The enhanced level can provide up to 90% reimbursement of the fixed costs through the adjustment support. For larger companies, a 70% subsidy rate still applies. The proposal with the higher level is due to increased restrictions.
The Government's proposal for extension and strengthening of the adjustment support requires a state aid approval from the European Commission
Updated news November 16, 2020
Readjustment support for individual traders affected by the pandemic
Readjustment support is now available for individual traders. The Government's proposal on 9 November is that the readjustment support is extended so that it can also be applied for in August - October 2020. The support is for those who have been hit hard financially as a result of the ongoing pandemic. Traders in the cultural sector and the hospitality industry are some companies that have not been able to benefit from the measures that have been presented so far. The government therefore introduced special sales support for individual traders.
In order for aid to be granted:
- for March and April 2020, it is required that the sole trader's net sales for the support period were less than 70 percent of the net sales for the reference period (same period the year before).
- for May 2020, the trader's net sales for the support period are required to be less than 60 percent of the net sales for the reference period (same period the year before).
- for June and July 2020, the trader's net sales for the support period are required to be less than 50 percent of the net sales for the reference period (same period the year before).
- for August, September and October, the trader's net turnover for the aid period is less than 50% of the net turnover for the reference period (same period the year before).
And
The decrease in turnover must be caused by the spread of the disease covid-19.
You apply to the Swedish Tax Agency, which has information on how to apply for adjustment support.
Original news from May 2020
Support for readjustment based on loss of turnover is an additional support aimed at companies that has lost large parts of their turnover as a result of the Corona pandemic presented by the Swedish government together with the Center Party and the Liberal Party on April 30. You can apply for the support until 31 August 2020. We have summed up the information about the proposal here.
The government hopes that more companies, with the help of this support measure, will be able to survive and have the opportunity to reorient and adapt their activities to the new conditions that prevail. The idea is that many companies may have to adjust their production and deliveries if the public health authorities' recommendations on, among other things, social distancing and travel restrictions will be prolonged.
The aid is designed to mimic similar aid measures in Norway and Denmark. The aid is targeted at all companies, regardless of industry. The Government estimates that 180,000 companies in Sweden will be eligible for the support.
How is the support designed?
Enterprises with a decrease in turnover in the months of March and April 2020 compared to turnover in March and April 2019 may apply for the support. The size of the support will depend on how large the turnover loss a company has had. It will vary between 22.5 percent and 75 percent of the company's fixed costs excluding wage costs for March and April 2020. The maximum amount is proposed to be SEK 150 million per company.
Fixed costs include, for example, rent of premises and leasing costs. The aid is only calculated for two months that already have passed: March and April 2020.
Support for readjustment - some examples on calculations
During the press conference, the government highlighted three examples to illustrate how the support will be calculated for three different companies with different levels of fixed costs if they lose 50 or 90 percent of their turnover in March and April 2020 compared to March and April 2019.
Example 1
Company 1 has in addition to wage costs, SEK 250,000 fixed costs per month. That means that the company has fixed costs of SEK 500,000 for the months of March and April 2020. If the company loses 50 percent of its turnover in March and April 2020 compared to March and April 2019, the support will be 37.5 percent, i.e. SEK 187,500, which corresponds to 3/4 of the turnover loss held by the company. If the same company loses 90 percent of its turnover in March and April 2020, the support rate will be 67.5 percent, thereby increasing the support amount to SEK 337,500 for March and April.
Example 2
Company 2 has in addition to wage costs, SEK 2 million fixed costs for March and April 2020. For this company the support rate will be SEK 750,000 for a turnover loss of 50 percent and SEK 1,350,000 for a 90 percent turnover loss
Example 3
Company 3 has in addition to wage costs, fixed costs of SEK 300 million for March and April 2020. If company 3 lose 50 percent of its turnover in March and April compared with last year, the support rate will be 112.5 million. If the company loses 90 percent of its turnover, the support rate will be SEK 150 million and the company will thus hit the maximum amount for the support.
The Government will provide more information on the specific outlines of the support, the calculations and how and where to apply at a later date.
Who will be eligible for the support?
- The company needs to have had a turnover of at least SEK 250,000 during the past financial year
- As well as a loss of turnover of at least 30 percent in March and April 2020 compared to the same period in 2019, caused by the spread of covid-19.
- The company shall hold F-tax and conduct business activities in Sweden.
- Like for the short-time work allowance, there is a requirement that the company applying must not be undergoing restructuring or be in bankruptcy/insolvent or have large tax liabilities.
- The company must not have distributed dividend during the period March 2020 until June 2021.
How do I apply for the support?
It will be the Swedish Tax Agency that handles the applications and makes the payments of the support. The Swedish Tax Agency is also responsible for checking that the companies benefiting from the support comply with the requirements. There is a new section att www.skatteverket.se where you apply for the support.
When can the support be applied for?
It is possible to apply for the support from 22 June to 31 August 2020. The application is made via a new service in My pages on skatteverket.se.
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