Last week the chancellor announced a series of measures to help small businesses through the national challenges that coronavirus presents. In his initial statement, he commented that the government support would increase as the situation develops.
Yesterday, Rishi Sunak joined Boris Johnson on the coronavirus panel to introduce greater support of, in his words “an unprecedented package” to support the UK and a further pledge to do “Whatever it takes”.
In case you missed it, here are details of the enhanced support package announced as well as the support that remains unchanged:
- Statutory sick pay (SSP) can be claimed from day 1 if an employee is self-isolating due to the coronavirus. Sick pay will be refunded to business for 14 days of self-isolation. The weekly SSP amount is £94.25.
- Cash grants of £25,000 have been made available to businesses in the retail, hospitality and leisure sectorswith the commitment that these are not repayable.
- For the 700,000 smallest businesses across all sectors will be entitled to a grant totaling £10,000 per business and is also not repayable.
- Business rates for the retail, hospitality, and leisure sectors are to be suspended for 12 months commencing 6thApril. This will mean that every shop, pub, theatre, music venue, and restaurant will pay no business rates until April 2021.
- A clarification statement was made regarding business in the retail, hospitality and leisure sectors to reassure businesses that the government advice for people to avoid Cinema’s, Pubs, Theatres, and other leisure sites would allow for them to claim on any insurance policies they have in place. The government has also committed to assisting those that do not have these insurances in place.
- Starting next week loans for small businesses will be made available up to £5m, interest-free for 6 months, for small businesses. This is to ensure that fixed costs can be met with the biggest of these being rent and staff costs. We are still waiting on details regarding individual eligibility and the application process which will be available from next week.
- If you have a VAT payment due between 20 March 2020 and 30 June 2020, you have the option to defer the payment until 31 March 2021 or pay the VAT due as normal. HMRC will not charge interest or penalties on any amount deferred. If you use direct debit for payments, be sure to cancel this with your bank.
- On a personal note, mortgage lenders can approve “mortgage holidays” which means that mortgage payments can be suspended, without penalty, for three months.
This takes the government support package to £330bn which represents 15% of GDP, the chancellor has also intimated that he will do more. There were references made to employment support packages, however, no additional information was provided.
If you have not already seen it, take a look at our blog Coronavirus and my cashflow for some practical advice on what you can be doing now to help your cashflow.
It will almost certainly be a challenging time for everyone. Look after yourselves, family, friends, and colleagues. If you need some support and advice, please contact us.