What is the Government doing for Businesses?
As of 5pm last night (17th March 2020) the Chancellor of the Exchequer announced the update on the government’s response to help businesses start to deal with the financial impact of the Corona Virus that previously announced in last week’s budget.
While many will no doubt say that these measures are not enough, are not targeted enough or exclude some groups altogether. This package of measures is on a scale we’ve never seen before and the repeated mantra was “we will do whatever it takes”.
Some £330billion of loans to businesses will be guaranteed by the government – with up to £5million each for smaller firms. These would be interest free for the first six months and delivered under the ‘Corona Virus Business Interruption Loan Scheme’ by the British Business Bank. Sadly at present the details of how to apply and the criteria needed to qualify are not available.
Mr Sunak said there would be a cash grant of £25,000 for each small and medium sized business plus every retail, hospitality and leisure sector firm would be exempt from rates for a year.
Other businesses who currently benefit from small firms business relief would also be eligible to receive a £10,000 cash grant.
Planning rules will be waived for restaurants that want to switch to take-away services.
While details are still sketchy it would appear that the grants, rates holidays and planning matters will be dealt with by local authorities so may vary across individual councils. It is unclear whether these amounts will need to be claimed by individual businesses or will be paid automatically, similarly the timescales for these payments is not detailed.
Mr Sunak also said banks will give a three-month mortgage holiday to people who need help – pledging he will ‘go much further’ to support individuals’ financial security in the coming days. He hinted that could involve the government picking up the tab for ‘fixed costs’ of staff wages, so firms do not have to lay people off.
At present, the government will repay Statutory Sick Pay for employees although it has been hinted at that this could rise from the current £94.25 per employee per week (for a full time equivalent) with a further review of the entitlement and access of benefits for self employed individuals and those not offered protection by SSP such as those in the ‘Gig Economy’ or employed under zero hour contracts.
HM Revenue & Customs will defer tax payments without interest or penalties or suspend current debt recovery actions as long as returns continue to be made on time and the request to defer payments is made before the due date. Please remember that this is only a deferral exercise at this stage.
These are uncertain times and things are moving fast so we would urge you to keep abreast of matters by following a trusted broadcaster such as the BBC and also using all the reputable information sources that are open to you such as the CBI, FSB, Chambers of Commerce and your relevant trade body.
As things continue to move so quickly, the important details of how, what and when are not readily available but as and when we have more details then we will be in touch again.
Until then, stay strong and stay safe.