The Government has pledged more than £330 billion overnight to help businesses struggling with the economic impact of the ongoing COVID-19 outbreak.
The Chancellor, Rishi Sunak, has pledged to do “whatever it takes” to help businesses survive through these difficult and uncertain times and we are also standing by this commitment.
To help you gain a greater appreciation of these latest measures and when/how you will be able to access them, we have provided a guide to these points below:
Coronavirus Business Interruption Loan Scheme
The business interruption loans announced at last week’s Budget have been significantly extended allowing small businesses to borrow up to £5 million to pay rent, salaries, suppliers or purchase stock.
The loans will be interest-free for the first six months, thanks to a pledge from the Government to cover interest payments during this period.
The scheme will be delivered by the British Business Bank, a state-owned body tasked with supplying credit and finance to small and medium-sized businesses.
The Government has said that these loans will be accessible from next week and it will be releasing information on the process required to apply for a loan soon. More information regarding these loans can also be found here.
We are closely monitoring this situation and will let you know once the application process has been clarified.
Large firm liquidity
Many businesses work in a supply chain that supports much larger businesses.
To ensure these larger firms can continue to make payments to smaller firms and survive this ongoing economic situation, the Government will launch a major new scheme backed by the Bank of England to help them bridge coronavirus disruption to their cashflow through loans.
Businesses must continue to monitor the financial health of customers and suppliers to ensure that they do not experience disruption from the closure of another firm.
The Government has confirmed that the introduction of the off-payroll rules, or IR35, to the private sector will now be delayed from 6 April 2020 to 6 April 2021.
Chief Secretary to the Treasury, Steve Barclay, told Parliament that the suspension was a response to the COVID-19 pandemic, but confirmed it would still go-ahead next year.
Business rates and grants
The Government has pledged £20 billion of business rates support and grant funding to help the businesses worst-affected by the outbreak of COVID-19.
- Abolishing business rates for all businesses in the retail, hospitality and leisure industries in England for the next 12 months.
- Increasing the grants to small businesses eligible for Small Business Rate Relief announced in last week’s Budget from £3,000 to £10,000.
- Offering additional grants of £25,000 to retail, hospitality and leisure businesses operating from smaller premises, with a rateable value over £15,000 and below £51,000.
This funding will be made available to local authorities to distribute in their local area.
The process for applying for grants may differ from authority to authority and most have not yet made it clear how they intend to deliver this support.
Business rates support is expected to be available from the start of next week and we will keep you updated on the process for applying for funding as the situation becomes clearer.
Insurance firms have been told that Government advice regarding the restriction of visits to pubs, clubs and theatres etc. is sufficient for businesses to make a claim on their insurance where they have appropriate business interruption cover for pandemics.
The food industry, including pubs and restaurants, will see a temporary relaxation in planning regulations that will allow them to start providing takeaways to customers without a planning application to help support those needing to self-isolate.
The Chancellor said the Government is committed to protecting individuals and businesses from the effects of the global economic emergency created by the coronavirus pandemic and has made it clear that these initial measures are just the start of the Government’s plans.
The Chancellor is also seeking new legal powers in the Covid Bill to offer whatever further financial support the Government decides is needed.
Here to Help
These are difficult and uncertain times and we know that you are likely to have many questions about these measures and many other matters affecting your business.
We are committed to helping you make sense of the current situation and access the resources and support that you need to succeed in the coming weeks and months.
We also understand that clients may also need advice at this time in terms of financing, cashflow and structural changes, which we are happy to help with. Our team are standing by to support you, whatever queries or concerns you may have, to ensure you can move forward once this crisis has subsided. Please call us today to find out how we can help you.