Just six days after unveiling his £30 billion Budget business support package, Chancellor Rishi Sunak announced some significant changes in light of the coronavirus pandemic. In his address he stated that “I promise to do whatever it takes to support our economy through this crisis – and that if the situation changed, I would not hesitate to take further action. That is what I want to begin doing today.”
In addition, Steve Barclay, Chief Secretary to the Treasury, revealed the extension and enhancement of many of the measures announced in the spring Budget, and that the government was postponing the launch of the new private sector IR35 regime until 1 April 2021.
The delay of the IR35 roll-out is in direct response to pressure for the government to help and support the self-employed and freelancers through the current crisis. The government has committed to providing £350 billion to support businesses and individuals, and the sum that covers 15% of UK GDP is to be utilised as follows:
£330 billion will form a package of bank loan guarantees, to assist businesses with managing their cash flows during the pandemic. In reality, this means that businesses who require cash to pay salaries, rent, suppliers, or purchase stock, will be able to access a government-backed loan, on attractive terms.
The new economic package will be offered via liquidity support for large firms and encompass a new loan scheme from the Bank of England.
The new Business Interruption Loan Scheme has been increased from £1.2 million to £5 million for small and medium-sized firms, with interest payments being delayed for the first six months.
The government will be able to offer additional support to businesses when required through new legal powers in the Covid-19 Bill.
Business rates have been suspended for 12 months for all businesses in the retail, hospitality and leisure sector, an extension on the budget announcement where only businesses under a rateable value of £51,000 were eligible.
£25,000 grants to retail, hospitality and the leisure businesses in smaller premises, with rateable values over £15,000 and below £51,000, have now been put in place.
The small business rate relief grant has been increased from £3,000 to £10,000.
Chancellor Rishi Sunak confirmed that the hospitality and leisure businesses would be able to claim on insurance, if they have the appropriate business interruption cover for pandemics in place. Concern had been raised that this would not be possible, as the government had advised the public to stay away, rather than forcing the closure of the venues.
It was confirmed that mortgage lenders will support customers affected by coronavirus with up to three months’ payment holiday.
The new measures have raised differing views across a number of business communities and for help and advice on how these may affect you, please contact our dedicated team on 01932 320800 or email firstname.lastname@example.org.