The government recognises the huge challenges faced by many businesses in light of the Coronavirus epidemic. In both the Budget, and statements by the Chancellor on 17th and 20th March 2020, a set of measures to support businesses have been announced.
Support to pay employees wages
- For the first time in British history, the government is stepping in to pay people's wages. Government grants will cover 80% of the salary of retained workers, up to a total of £2,500 a month - above-median earnings.
- The scheme is open to any employer in the country and will cover the cost of wages backdated to March 1st. There is no limit on the funding for the scheme, and the government will pay to support as many jobs as needed.
- The scheme will open before the end of April, for at least 3 months.
VAT and taxes
- The next quarter VAT payments will be deferred, and no business will pay VAT between now and mid-June. Businesses will have until the end of the next Financial Year to repay those bills.
- All businesses and the self-employed in financial distress with outstanding tax liabilities may be eligible to receive support with their tax affairs through the HMRC's Time To Pay service. We all have to play our part in tackling this virus and slowing the spread. As with any new illness, information about the virus spreads is still emerging, but symptoms of Coronavirus include a cough, high temperature and shortness of breath.
Government guaranteed loans
- The government is making available an initial £330 billion of guarantees - equivalent to 15% of our GDP. That means that businesses who need access to cash to pay their rent, salaries, suppliers or purchase stock will be able to access a government-backed loan, on attractive terms. If demand is greater than the initial £330bn, the Chancellor will go further and provide as much capacity as required.
- These loans will be available through two main schemes, which will be up and running by the start of next week:
- For larger firms, to support liquidity, a new lending facility will be created to provide low cost, easily accessible commercial paper.
- To support lending to Small and Medium-Sized businesses, the new Business Interruption Loan Scheme will be extended, providing loans of up to £5 million, with no interest due for the first twelve months.
In the coming days, a potential support package for airlines and airports will be discussed.
Insurance, business rate relief and cash grants
- For pubs, clubs, theatres and other hospitality, leisure and retail venues which have a policy that covers pandemics, the government's closure action is sufficient and will allow businesses to make an insurance claim against their policy.
- For businesses which don't have insurance, those with a rateable value of less than £51,000 will receive an additional cash grant of up to £25,000 per business to bridge through this period.
- All businesses in these sectors, in addition to private nurseries, will pay no business rates this year regardless of their rateable value.
- The government will provide an additional £2.2 billion funding for local authorities to support small businesses that already pay little or no Business Rates, because of Small Business Rate Relief. This will provide a one-off grant of £10,000 to around 700,000 businesses who currently receive Small Business Rate Relief or Rural Rate Relief, to help meet their business costs. Local authorities will be fully compensated for these measures.
Statutory Sick Pay
- The government will legislate to allow small and medium-sized businesses (SME's) to reclaim Statutory Sick Pay (SSP) paid for sickness absence due to Coronavirus for up to two weeks.