The Chancellor Rishi Sunak has today (Thursday) outlined a raft of further measures to support the UK’s businesses affected by the COVID-19 outbreak.
Briony McDermott from Wake Smith Solicitors’ employment team summarises his announcements.
The Treasury are making available £330bn of loan guarantees. These guarantees will underpin government backed bank loans on attractive terms. The loans can be used to support businesses through financial difficulties during the COVID-19 crisis. As loans, at some point interest and repayments will have to be charged and made. The Chancellor confirmed that if this level of support was insufficient, further guarantees would be forthcoming.
Support for liquidity to larger firms will be provided by low-cost, easily accessible commercial packages. Support for smaller firms will be accessed via the Business Interruption Loan Scheme previously announced – the initial loan ceiling of £1.2m is to be increased to £5m and no interest due for the first six months. Both of these schemes are due to be up and running by the start of next week.
The Government has now intervened for businesses in the hospitality, leisure and retail sectors who have had difficulties making a claim for business interruption from their insurers due to government interventions. Insurers have agreed to pay up in appropriate cases.
Businesses in these sectors, with a rateable value below £51,000, will also receive – in addition to the 100% rates relief previously announced – a cash grant of up to £25,000 per business. The 100% rates reduction will be applied to all business irrespective of rateable value in this sector.
This means that all businesses in the retail, hospitality or leisure sector (shops, pubs, theatres, music venues, restaurants) will have no rates to pay for 2020-21, and if the rateable value of their property is below £51,000, they may also be able to claim a cash grant of up to £25,000.
The £3,000 grants to smaller business, which were announced last week, will increase to £10,000.
Mortgage lenders have agreed with the Government that individuals disrupted by the Coronavirus can have at least a three-month holiday from making mortgage repayments.
The Chancellor also hinted that there would be further support for incomes and jobs – potentially an increase in statutory sick pay or increased access to State Benefits, but nothing has been confirmed as yet.
How to claim for the various loans and grants on offer is also not clear so far, neither had the Government confirmed how employers can claim back the 14-day cost of Statutory Sick Pay paid to employees.
The Bank of England has also cut interest rates for the second time in eight days, reducing the rate to its lowest-ever level. The Bank has reduced the rate from 0.25% to 0.1%. It has also increased quantitative easing by £200bn.
Please get in touch if you need more information or support on your rights as an employer or employee by emailing Briony McDermott at [email protected]
