UK - Government’s Coronavirus Economic Response
Written March 24, 2020
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.
This includes a package of measures to support businesses including:
● a Coronavirus Job Retention Scheme
● deferring VAT and Income Tax payments
● a Statutory Sick Pay relief package for small and medium sized businesses
● a 12-month business rates holiday for all retail, hospitality, leisure and nursery businesses in England
● 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 £15,001 and £51,000
● the Coronavirus Business Interruption Loan Scheme offering loans of up to £5 million for SMEs through the British Business Bank
● 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
Coronavirus Job Retention Scheme
All UK employers will be able to access support to continue paying part of their employees’ salary for those employees that would otherwise have been laid off during this crisis. To access the scheme, you will need to designate affected employees as ‘furloughed workers’ and notify employees of this change. HMRC will reimburse 80% of furloughed workers wage costs, up to a cap. Find more info here.
Deferring VAT Payments
The Government has announced an automatic deferral of VAT payments for 3 months. If you’re self-employed, Income Tax payments due in July 2020 under the Self-Assessment system will be deferred to January 2021.
For VAT, the deferral will apply from 20 March 2020 until 30 June 2020.
Income Tax Payments Deferral
For Income Tax Self-Assessment, payments due on the 31 July 2020 will be deferred until the 31 January 2021. This is also automatic.
Businesses paying sick pay to employees
A Statutory Sick Pay relief package has been announced for small and medium businesses allowing employers to reclaim Statutory Sick Pay (SSP) paid for sickness absence due to COVID-19. There are eligibility criteria which you can find here.
Support for retail, hospitality and leisure businesses that pay business rates
There will be a business rates holiday for retail, hospitality and leisure businesses in England for the 2020 to 2021 tax year. Details on eligibility criteria and how to access the scheme can be found here.
Cash grants for retail, hospitality and leisure businesses
The Retail and Hospitality Grant Scheme provides businesses in the retail, hospitality and leisure sectors with a cash grant of up to £25,000 per property. Your business must be based in England and in the retail, hospitality or leisure sector. Grants vary depending on the ratable value of the property. If you are eligible, your local authority will be in touch.
Support for nursery businesses that pay business rates
A business rates holiday for nurseries in England will be introduced for the 2020 to 2021 tax year.
Coronavirus Business Interruption Loan Scheme
The temporary Coronavirus Business Interruption Loan Scheme will support businesses with access to loans, overdrafts, invoice finance and asset finance of up to £5 million and for up to 6 years.
The government has also announced a Business Interruption Payment to cover the first 12 months of interest payments and any lender-levied fees, so smaller businesses will benefit from no upfront costs and lower initial repayments. There are maximum turnover limits and other eligibility criteria, but the scheme is now open for applications through all major banks.
COVID-19 Corporate Financing Facility
Under the new Covid-19 Corporate Financing Facility, the Bank of England will buy short term debt from larger companies.
Time to Pay service
If you are in financial distress and have outstanding tax liabilities, you may be eligible to receive support through HMRC’s Time To Pay service.
These are agreed on a case-by-case basis and will depend on your situation. Get in touch with us to see how we can help you.