A £350bn package of support to help businesses survive the impact of the coronavirus pandemic has been unveiled by Chancellor Rishi Sunak as the crisis deepens.
It is a massive amount of money – indicating the gravity of the situation we find ourselves in – and given we are in unchartered territory it is both a welcome and necessary move.
However, it remains to be seen if it is enough or if even more measures will be needed, particularly when it comes to the survival of small businesses.
And it follows an earlier announcement in the Budget of £30bn of support to the economy to deal with the crisis by investing in public services, increasing support for vulnerable people and providing business with tax reliefs and loans.
The Chancellor has declared: “Any business who needs access to cash to pay their rent, their salaries, suppliers or purchase stock will be able to access a government-backed loan or credit on attractive terms.”
The latest raft of support announced includes a statutory sick pay relief package for SMEs and Business Rate Relief for small businesses and pubs.
There will be business grant funding of £3,000 for all business in receipt of Small Business Rates Relief (SBRR) and Rural Rates Relief.
And the Coronavirus Business Interruption Loan Scheme will look to support long-term viable businesses who may need to respond to cash-flow pressures by seeking additional finance.
The amount businesses can borrow through the scheme has been increased from £1.2m to £5m and they can access the first six months of that finance interest free, as government will cover the first six months of interest payments.
Here are some of the top lines from the Chancellor’s announcement:
The government says it will provide £20bn of business rates support and grant funding to help the most-affected firms manage their cashflow by:
• Giving all retail, hospitality and leisure businesses a 100 per cent business rates holiday for the next 12 months
• Increasing grants to small businesses eligible for Small Business Rate Relief from £3,000 to £10,000
• Providing further £25,000 grants to retail, hospitality and leisure businesses operating from smaller premises, with a rateable value over £15,000 and below £51,000
It has also been confirmed that government advice to avoid pubs, clubs and theatres is sufficient for businesses to claim on their insurance where they have appropriate business interruption cover for pandemics in place.
And to support the food industry and help provide meals for people who need to self-isolate, regulations have been relaxed to allow pubs and restaurants to start providing takeaways without a planning application.
Mortgage lenders have agreed they will support customers that are experiencing issues with their finances as a result of Covid-19, including through payment holidays of up to three months. This will give people the necessary time to recover and ensure they do not have to pay a penny towards their mortgage in the interim.
New legislation will allow SME businesses and employers to reclaim statutory sick pay (SSP) paid for sickness absence as a result of Covid-19.
The refund will cover up to two weeks’ SSP per eligible employee who has been off work because of the coronavirus.
Employers with fewer than 250 staff will be eligible – the size of an employer will be determined by the number of people they employed as of February 28, 2020.
Employers will be able to reclaim expenditure for any employee who has claimed SSP (according to the new eligibility criteria) as a result of Covid-19.
The government says it will work with employers over the coming months to set up the repayment mechanism for employers as soon as possible.
To discuss how you can access support and for help on any issues you are facing please contact me on me on 01772 430000.