In an effort to minimise the disruption and financial impact on of COVID-19 on UK business, Rishi Sunak has pledged more than £330 billion of state backed loans and £20 billion of tax relief and grants to support businesses through this period.
Clare Lang, Corporate Partner at mfg Solicitors LLP, highlights the key measures being introduced to support businesses below.
Statutory sick pay relief package for SMEs
This relief will allow SMEs with less than 250 employees to reclaim up to two weeks’ SSP per eligible employee who has been off work because of COVID-19.
Business rates holiday and grants for the retail, hospitality and leisure sectors
Business rates for all retail, hospitality and leisure businesses in England for the 2020 to 2021 tax year will be abolished. In addition, grants of £25,000 are being offered to retail, hospitality and leisure businesses operating from smaller premises with a rateable value between £15,000 and £51,000.
Small business grant funding of £10,000 for all business in receipt of small business rate relief or rural rate relief
One-off grants for small businesses eligible for small business rate relief or rural rate relief will be increased from £3,000 to £10,000, to help meet ongoing business costs.
Coronavirus Business Interruption Loan Scheme
A new temporary Coronavirus Business Interruption Loan Scheme, delivered by the British Business Bank, has been announced to support primarily SMEs in accessing bank loans and overdrafts. The Scheme will support debt packages of up to £5 million in value. Under the Scheme, the Government will guarantee up to 80% on each loan, to give lenders further confidence in continuing to provide finance to SMEs. The Government will not charge any fees, and will cover the first 6 months of interest payments. Such loans should be available from next week.
Large firm facility
To enable large firms who are in supply chains which support smaller businesses to continue to make payments to these smaller firms, the Bank of England has announced a new facility to enable them to raise working capital through the purchase of short-term debt. The aim is to support corporate finance markets overall and ease the supply of credit to all firms. Further details of the scheme is to be provided in the coming days, and the scheme should be available from next week.
HMRC Time To Pay Scheme
Businesses and self-employed people with outstanding tax liabilities may be eligible to receive support with their tax affairs through the HMRC Time To Pay scheme. Arrangements must be agreed with HMRC on a case-by-case basis – HMRC has a dedicated helpline on 0800 0159 559.
The Government have announced the anticipated changes to the off-payroll rules, or IR35, in the private sector will be delayed by a year until April 2021.
Restaurants and others in the food industry will see a temporary relaxation of planning regulations which would normally restrict them from supplying take-away food.
Banks and Private Lenders
A number of private lenders are also making funds available to small businesses impacted by the virus, including £2 billion from Lloyds and £5 billion from NatWest.
Here to Help
We at mfg are committed to supporting you during these uncertain times, and know that you will have many questions about these measures, and other factors affecting your business. Our specialist teams of business lawyers are here to help – please do not hesitate to contact us if you need any assistance or guidance on 01562 820181.