Here our Business and Commercial Department provides key information on this week's news of support for businesses.
On 17th March 2020, Chancellor of the Exchequer Rishi Sunak, made further governmental announcements in light of the COVID-19 pandemic.
Within this he detailed a package of financial measures in an attempt to protect the economy against the impact the pandemic is having, and will continue to have, on businesses throughout the United Kingdom. Mr Sunak stated that he and the government will do "whatever it takes" to support the economy and to provide "all the tools you need to get through this."
The Chancellor focussed on that he would be increasing the £30bn package detailed last week, to an unprecedented package of government-backed loans amounting to £330bn - equivalent to 15 per cent of the United Kingdom's GDP.
The financial relief will be delivered via two main schemes and distributed as follows:
Large-sized firms (turnover >£25.9m and employees >250):
- Liquidity support will be provided by way of a low cost, easily accessible lending facility agreed with the Bank of England via the purchase of short-term debt to allow those businesses to continue financing their short-term liabilities;
- A 12-month business rates holiday for all retail, hospitality and leisure businesses; and
- A HMRC Time to Pay Scheme.
Small and medium-sized firms (turnover <£25.9m and employees <250):
- Most key, there will be an extension to the new Coronavirus Business Interruption Loan Scheme, allowing SMEs access to bank lending and overdrafts of up to £5m, with no interest to be payable during the first six months, and offering a guarantee of up to 80 per cent to incentivise lenders to continue providing financial support where it is most crucial;
- Grant funding of up to £25,000 for those within the retail, hospitality and leisure industries with a rateable value of less than £51,000;
- Small business grant funding of up to £10,000 for all businesses eligible for small business rate relief or rural rate relief;
- A 12-month business rates holiday for all retail, hospitability and leisure businesses ;
- Statutory sick pay relief packages covering two weeks' SSP per eligible employee off work due to COVID-19;
- Mortgage lenders to offer a three-month repayment holiday for those affected by Coronavirus; and
- A HMRC Time to Pay Scheme.
The Chancellor also clarified that for those businesses with an insurance policy which provides cover during such pandemics or government-ordered closure, the government's guidance and response is sufficient in allowing those businesses to claim against their policies.
There are still steps to be laid out following focussed and necessary conversations with unions and businesses, particularly in relation to airlines and airports and specific employee income support.
As the situation evolves, the Chancellor's actions will undoubtedly ebb and flow accordingly, but the intention was laid clear, that they will do "whatever it takes" not just to support the health of the country, but our livelihoods.
We too are anxious to ensure that we continue to support our clients so far as we are able and that you have the necessary, uninterrupted legal support needed through these extraordinary times, whether that be employee or commercial focussed. Please do not hesitate to contact us for any support we can provide. Call us on 01603 620508 or complete our online enquiry form and a member of the department will be in touch very soon.
Government direction can also be found https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-support-for-businesses">here.