The Chancellor of the Exchequer has announced a package of measures to support businesses through this period, in close co-ordination with the Bank of England.
The Bank of England has temporarily reduced the Bank Rate to 0.1 per cent. It has taken further measures to help ensure that this rate reduction will translate through to the real economy and that capital will be available for new lending. As the virus progresses, and it's impact understood, further updates will be provided.
The Chancellor has announced one-off top up grants for retail, hospitality and leisure businesses worth up to £9,000 per property to help businesses through to the Spring:
- £594 million discretionary fund also made available to support other impacted businesses
- comes in addition to £1.1 billion further discretionary grant funding for Local Authorities, Local Restriction Support Grants worth up to £3,000 a month and extension of furlough scheme
- £4,000 for businesses with a rateable value of £15,000 or under
- £6,000 for businesses with a rateable value between £15,000 and £51,000
- £9,000 for businesses with a rateable value of over £51,000
Business Support Finder
A new ‘support finder’ tool will help businesses and self-employed people across the UK to quickly and easily determine what financial support is available to them during the coronavirus pandemic.
Statutory Sick Pay for businesses with fewer than 250 employees
In the Budget, the Chancellor announced that legislation will be brought forward to allow businesses with fewer than 250 employees to reclaim up to 14 days’ Statutory Sick Pay paid for sickness absence due to COVID-19.
Business rates and grants
The Business Rates retail discount will be raised to 100 per cent for one year and expanded to the leisure, and hospitality sectors, with a £5,000 rates discount introduced for pubs in England with a rateable value below £100,000. Taken together with existing Small Business Rates Relief an estimated 900,000 properties, or 45 per cent of all properties in England, will receive 100 per cent business rates relief in 2020/21.
To support around 700,000 businesses currently eligible for Small Business Rate Relief, local authorities in England will receive a total of £2.2 billion to provide a £10,000 grant to help meet their ongoing business costs.
All businesses in the retail, hospitality and leisure sectors will not have to pay business rates, irrespective of their rateable value, for 12 months – that’s every single shop, pub, theatre, music venue, restaurant, and any other business in the retail, hospitality or leisure sectors. In addition, small businesses in these sectors can access an additional grant scheme of up to £25,000.
To support nurseries at this time, the Chancellor has also decided that they will also now be eligible for a business rates holiday for one year. That means non-local authority providers of childcare will pay no business rates in 2020-21, from 1 April.
The Government have expanded the business grant funds scheme, helping small businesses previously outside its scope. This top-up is aimed helping businesses in shared spaces, regular market traders, small charity properties that would meet the criteria for Small Business Rates Relief, and bed and breakfasts that pay council tax rather than business rates. But local authorities may choose to make payments to other businesses based on local economic need. The allocation of funding will be at the discretion of local authorities.
Businesses required to close in England due to local or national restrictions will be eligible for the following under the Local Restrictions Support Grant:
- For properties with a rateable value of £15k or under, grants to be £1,334 per month, or £667 per two weeks;
- For properties with a rateable value of between £15k-£51k grants to be £2,000 per month, or £1,000 per two weeks;
- For properties with a rateable value of £51k or over grants to be £3,000 per month, or £1,500 per two weeks.
A new temporary Coronavirus Business Interruption Loan Scheme, delivered by the British Business Bank, will launch to support businesses to access bank lending and overdrafts and will be interest free for twelve months. £330 billion has been guaranteed – equivalent to 15 per cent of our GDP –so any businesses who needs access to cash to pay their rent, the salaries of employees, pay suppliers or purchase stock, will be able to access a government-backed loan. To maximise the support available, the Chancellor is extending the scheme so that all viable small businesses affected by COVID-19, and not just those unable to secure regular commercial financing, will now be eligible should they need finance to keep operating during this difficult time. The government is also stopping lenders from requesting personal guarantees for loans under £250,000 and making operational changes to speed up lending approvals.
The new Coronavirus Large Business Interruption Loan Scheme (CLBILS) will ensure that more firms are able to benefit from government-backed support during this difficult time. It will provide a government guarantee of 80% to enable banks to make loans of up to £25 million to firms with an annual turnover of between £45 million and £500 million. This will give banks the confidence to lend to more businesses which are impacted by coronavirus but which they would not lend to without CLBILS. Loans backed by a guarantee under CLBILS will be offered at commercial rates of interest and further details of the scheme will be announced later this month.
The Bounce Back Loans Scheme – a 100 per cent government-backed loan scheme enables small businesses to borrow up to £50,000 and access the cash within days. The scheme has been designed to ensure that small firms who need vital cash injections to keep operating can get finance in a matter of days. It will provide lenders with a 100 per cent guarantee for the loan – and pay any fees and interest for the first 12 months. No repayments will be due during the first 12 months. The scheme is open to applications until 31 January 2021.
Businesses and self-employed people in financial distress may be eligible to receive support with their tax affairs through HMRC’s Time To Pay service. The agency has also set up a phone helpline which you can reach at 0800 0159 559.
No business will pay any VAT from 20 March the end of June; and they will have until the end of the financial year to repay those bills.
From 15 July 2020, the Government will cut the rate of VAT applied across the UK to hospitality, accommodation and attractions from 20 per cent to 5 per cent until 12 January 2021. This could support almost 2 million businesses and protect 2.5 million jobs.
HMRC has a set up a new helpline to support businesses and self-employed people who are concerned about not being able to pay their tax due to coronavirus. The helpline number is 0800 024 1222.
Coronavirus Job Retention Scheme
The Government have launched the Coronavirus Job Retention Scheme to step in and help pay people’s wages. Any employer in the country who promises to retain their staff, can apply for a grant to cover most of the wages of people who are not working but are furloughed and kept on payroll, rather than being laid off.
Government grants will cover 80 per cent of the salary of retained workers up to a total of £2,500 a month – above the median income.
The cost of wages will be backdated to 1st March and will be open initially for at least three months – and we will extend the scheme for longer if necessary. The scheme has now been extended by four months, until the end of October.
From July, businesses can bring furloughed employees back part time. This is a month earlier than previously announced to help support people back to work. Employers will be able to claim the furlough grant for the proportion of the employees’ normal hours they are not working – but they must pay their employees for the hours they are working. The Government will continue to pay 80 per cent of wages up to £2,500, plus employer National Insurance and pension contribution.
From August, the job retention scheme will be slowly tapered to reflect that people will be returning to work. The government will pay 80 per cent of wages up to a cap of £2,500, but employers will start paying employer National Insurance and pension contributions.
From September, the government will pay 70 per cent of wages up to a cap of £2,190. Employers will be asked to pay the remaining 10 per cent, in addition to employer National Insurance and pension contributions.
From October, the government will pay 60 per cent of wages up to a cap of £1,875. Employers will be asked to pay the remaining 20 per cent, in addition to employer National Insurance and pension contributions
The Coronavirus Job Retention Scheme will now remain open until the end of March 2021, with employees receiving 80% of their current salary for hours not worked, up to a maximum of £2,500.
The Chancellor announced a new £1.25 billion coronavirus package to protect firms driving innovation in UK.
The package includes a £500 million loan scheme for high-growth firms, called the Future Fund, and £750 million of targeted support for small and medium sized businesses focused on research and development.
Cafes, Restaurants and Pubs
Cafes, restaurants and pubs can automatically become takeaways and deliveries, under an emergency change to the planning laws, scrapping the need for to apply for change of use permission in bid.
More advice and support
Uk Finance are also offering business support and can be contacted via firstname.lastname@example.org.
Small Business Britain have launched 'The Big Support' Campaign, directing businesses to business and mental health support.