Government support on Covid-19 update

The Chancellor announced further measures yesterday as part of a “comprehensive, coordinated and coherent response” to the serious and evolving economic situation arising from the Covid-19 pandemic. A further policy change was announced by the Chief Secretary to the Treasury this morning and more announcements are expected in the immediate future.
Highlighted below are the major changes announced and we will aim to keep you updated on further changes over the coming days.

Support for Businesses
Loan Guarantees

An initial £330 billion of guarantees – equivalent to 15% of the UK GDP- will be made available to any business which needs access to cash to pay rent, salaries, suppliers or to purchase stock will be able to access a government- backed loan, on attractive terms, if demand is greater than the initial £330bn the government have promised to provide as much capacity as required under the scheme.

Support will be delivered through two main schemes:

• For large firms, by agreeing new lending facility with the Governer of the Bank of England to provide low cost, easily accessible commercial paper
• For small and medium sized businesses, by extending the new Business Interruption Loan Scheme announced at the Budget last week, to increase the maximum loan from £1.2 million to up to £5 million, with no interest due for the first six months.
• Both of these schemes will be up and running by the start of next week.

Businesses in retail, hospitality and leisure sectors

For those businesses which have an insurance policy that covers pandemics, the government`s action is sufficient to allow businesses to make an insurance claim against their policy.
For those businesses in the retail, hospitality and leisure sectors, with a rateable value of less than £51,000, they will pay no business rates this year and they will also be provided with an additional grant of up to £25,000 per business – to help bridge through this period.
Additionally, the business rates holiday will be extended to all businesses in these sectors, irrespective of the rateable value of their properties.
Every single shop, pub, theatre, music venue, restaurant – and any other businesses in the retail, hospitality or leisure sector – will therefore pay no business rates whatsoever for 12 months, and if they have a rateable value of less than £51,000 they can now get a cash grant as well.

Cash grants for smallest businesses

Cash grants of up to £3,000 each to the 700,000 smallest businesses (those claiming Small Business Rate Relief) were promised in the budget- those grants have now increased to £10,000.

Introduction of IR35 Off Payroll Rules deferred

The taxation of consultants engaged by Medium and Large sized private enterprises was set to undergo a fundemental change from 5 April 2020 with the introduction of the IR35 Off Payroll Rules similar to those introduced for public sector in 2017. These changes have now been deferred for a year and will come into effect from 5 April 2021.

Employment and Statutory Sick Pay

Statutory Sick Pay (which provides up to £94.25 per employee per week) will be available to SME`s (businesses with less than 250 employees) for two weeks for Covid-19 sickness absence and will be available from the first day of sickness absence without need for confirmation from a doctor.

Many clients have queries on helping maintain staff health and safety, flexible working and working from home, issues if the workplce has to be closed or staff have to be laid off or put on short time working.
ACAS are providing an effective regularly updated source of detailed advice which is available at https://www.acas.org.uk/coronavirus
Business Insurance

Business Interruption and other insurance policies which include cover for pandemics and government ordered closedowns should be triggered by the government announcements made on 17 March. Businesses should check their insurance policies and notify their insurers of claims if these are available.

Individuals

Mortgage lenders will offer at least a three month mortgage payment holiday.
Further announcements are expected in the coming days to support peoples financial security which may include new forms of employment support to help protect people`s jobs and incomes through the period of the pandemic and the subsequent economic recovery.

For further government support updates please see below links:

Government Support package

Deferring VAT and Income tax payments Covid-19  

Covid-19 Job Retention

Government Support Covid-19 Statutory Sick Pay