The Chancellor of the Exchequer, Rishi Sunak, has this evening announced significant new measures to help businesses and employees cope with the impact of COVID-19. He had previously said that he would do whatever it takes and he seems to be living up to his word.
The principal levels of support are:
The Coronavirus Job Retention Scheme
- Up to 80 per cent of salaries, capped at £2,500 per “retained” employee (the Chancellor said these are “people who are not working but are furloughed and kept on payroll, rather than being laid off”)
- To be paid by grants provided to employers
- Available to all UK businesses
- Back-dated to 1st March
- Available initially for 3 months
- Employers must request grant from HMRC
- First grant available within weeks, aiming to be in place before the end of April
- The government has urged that all employers look at the support available before they lay people off
Coronavirus Business Interruption Loan Scheme
- Loans now interest free for 12 months instead of 6 months
- The loans of up to £5 million should be available from Monday
- Further measures for larger businesses will be announced next week, but we will need to see how easy it is for these loans to be accessed for those who need them most
Cash flow support to be provided through the tax system
- The next VAT bill will be deferred and will not have to be paid until the end of the year. In practice, it is likely that this can be deferred for longer for certain struggling businesses
- Self employed individuals will not have to pay their tax due on 31st July but this can be deferred until next January
- Mortgage payment deferrals for three months
- Increased support for renters and also for those who are unemployed through increases to housing benefit, universal credit and working tax credit
A summary of the announcement can be found here, the detail of which will evolve over the coming days.
If you need assistance during these difficult times then please speak to your usual Beavis Morgan group Client Partner who will be happy to give advice and support based on your own situation.
The team at BM Advisory is also on hand and offers extensive experience in providing restructuring and refinancing advice to businesses across a range of industry sectors.
We are open for business as usual and are here to support you.
Some of our clients have been clients for over 50 years – or longer – and we hope that these relationships are kept alive to continue for the next 50 years.