Coronavirus (COVID-19) - support for business
The Chancellor has set out a package of temporary, timely and targeted measures to support public services, people and businesses through this period of disruption caused by COVID-19.
The Bank of England has cut their interest rate to 0.1 per cent, as lower interest rates mean cheaper loans for businesses and households. This will reduce the costs faced by both businesses and households in the UK. They are similarly helping businesses pay their staff and suppliers by working closely with HM Government to support large businesses by offering them cash for their corporate debt. This means that banks and building societies can continue to focus on supporting small and medium sized companies.
The Bank of England continues to watch the British economy closely in order to see how it responds to the COVID-19 pandemic and also Brexit.
As of the 05.11.20, the Bank of England injected £150bn into the UK economy to help it recover in a round of 'quantitative easing'.
The package introduced by the Chancellor contains measures to support businesses including:
- Coronavirus Job Retention Scheme – full details of which can be found here
- deferring VAT and Income Tax payments
- Statutory Sick Pay relief package for SMEs
- 12-month business rates holiday for all retail, hospitality and leisure businesses in England– this scheme will issue convertible loans between £125,000 to £5 million to innovative companies which are facing financing difficulties due to the coronavirus outbreak
- Small business grant funding of £10,000 for all business in receipt of small business rate relief or rural rate relief
- Grant funding of £25,000 for retail, hospitality and leisure businesses with property with a rateable value between £15,000 and £51,000
- The Coronavirus Business Interruption Loan Scheme – to help medium and small sized businesses access loans and other kinds of finance up to £5 million due to COVID-19 difficulties.
- Coronavirus Bounce Back Loan – this scheme helps small and medium sized businesses to borrow between £2,000 and up to 25% of their turnover. The maximum loan available is £50,000. The Government guarantees 100% of the loan and there is no interest for the first 12 months.
- A new lending facility from the Bank of England to help support liquidity among larger firms, helping them bridge coronavirus disruption to their cash flows through loans
- The HMRC Time To Pay Scheme
Detailed information is provided in this guide, which will be updated as new measures are introduced.
The guide includes the following information:
- Support for businesses through the Coronavirus Job Retention Scheme
- Support for businesses through deferring VAT and Income Tax payments
- Support for businesses who are paying sick pay to employees
- Support for businesses that pay business rates
- Support for businesses that pay little or no business rates
- Support for businesses through the Coronavirus Business Interruption Loan Scheme
- Support for larger firms through the COVID-19 Corporate Financing Facility
- Support for businesses paying tax: Time to Pay service
- If you are a UK-VAT registered business that opted in for the deferral of VAT and Income Tax payments between 20 March and 30 June 2020, you now need to continue to submit VAT returns as normal and on time; pay the VAT in full on payments due after 30 June and set up cancelled Direct Debits in enough time for HMRC to take the payment.
New support - 19th October
- A new £300million fund for firms affected will open from the 26th October
- The Welsh Government has said that every firm covered by small business rates relief would receive a £1,000 payment.
- Small and medium-sized retail, leisure, and hospitality firms that have to close will get a one-off payment of up to £5,000.
- There will be additional discretionary grants and support for smaller firms that are struggling the Welsh government has said
New support - 5th November
The Chancellor announced that workers across the United Kingdom will benefit from a 5 month extension of the Coronavirus Job Retention Scheme (CJRS). This means that the previously announced Job Support Scheme that was due to start on the 1st November has been postponed until 31 March 2021 when the CJRS ends.
- The CJRS will now run until the end of March, with employees continuing to receive 80% of their current salary for hours not worked. Employers will only need to contribute National Insurance and pension payments.
- Similarly, the Self-Employment Income Scheme (SEISS) will be increased, with the third grant covering November to January calculated at 80% of average trading profits, up to a maximum of £7,500.
- In addition to this, cash grants of up to £3,000 per month will be available for businesses which are closed worth more than £1billion every month.
- Plans to extend existing government-backed loan schemes and the Future Fund to the end of January, and an ability to top-up Bounce Back Loans.
- Extension of the mortgage repayment holiday for homeowners.
Further details of support for businesses and workers can be found here.
New support - 30 November from Welsh Government
Increased support for businesses in Wales has been announced following the new restrictions on hospitality and indoor entertainment and visitor attractions.
- To support the businesses impacted by the new restrictions, the Welsh Government will provide the most generous support package in the UK.
- They will provide a new £180m funding block in addition to UK support. This will provide grants of up to £100,000 for small and medium businesses, and £150,000 for larger businesses.
- Up to 10,000 businesses will be supported by the fund, which will be delivered through Business Wales.
- It is hoped payments can be made before Christmas where possible.
- It is estimated around 60,000 businesses, with a rateable value of under £150,000 will receive this support.
- In addition, hospitality, tourism and leisure businesses will be able to access a sector specific Economic Resilience Fund grant scheme.