Chancellor Rishi Sunak unveils new package of coronavirus business support
Posted: Wed 18th Mar 2020
*** For the latest information on coronavirus support for UK businesses, read this regularly updated post ***
Amid tougher measures advising people to avoid many hospitality businesses due to the coronavirus outbreak, chancellor Rishi Sunak has unveiled new support aimed at minimising the impact on companies. Dan Martin reports.
On Monday, prime minister Boris Johnson said people should now not visit pubs, clubs, cinemas, restaurants and theatres to slow down the spread of COVID-19.
Businesses affected reacted angrily to the announcement saying that because they haven't officially been told to close they are unlikely to be able to make successful business insurance claims.
Kate Nicholls, chief executive of trade body UK Hospitality, said the government has "effectively shut the hospitality industry without any support" which will lead to "thousands of businesses closing their doors for good and hundreds of thousands of job losses".
Coronavirus support for retail and hospitality businesses
Chancellor Rishi Sunak responded in Tuesday's coronavirus update with Boris Johnson. He stopped short of announcing that hospitality businesses were being forced to officially close but unveiled new support.
He said the government will be bold in its support for the economy and is making "interventions in the economy on a scale unimaginable only a few weeks ago".
Tackling the impact on the retail and hospitality sector, he said businesses of all sizes will pay no business rates for 12 months.
Businesses with an insurance policy that includes pandemics are covered by the government's position on advising people to avoid pubs, clubs and restaurants, the chancellor claimed. But smaller businesses that don't have insurance and those with a rateable value above £15,000 and below £51,000 can access a £25,000 grant.
Sunak also said that the £3,000 grants he announced in the Budget for businesses eligible for small business rate relief or rural rate relief will be increased to £10,000.
Billions in loans for businesses
A total of £330bn of government-backed loans, which is equal to 15% of the UK's GDP, will be made available. Small and medium sized businesses will be able to access funding through the new Coronavirus Business Interruption Loan Scheme (CBILS) that was announced in the Budget.
Loans through CBILS will be increased from a maximum of £1.2m to £5m. No interest will be payable for six months and the scheme will launch next week, quicker than it was previously thought.
The chancellor said the amount of loans available can be increased if needed and employment support around protecting people's incomes will be announced in the coming days.
Other support announced in the Budget included sick pay refunds and tax payment deferrals. Enterprise Nation is tracking when and how businesses can access the support in this post.
Responding to the new announcements, Enterprise Nation founder Emma Jones said:
"Direct cash grants will provide a helpful amount of cover, helping small businesses to even out their budgeting and making room for them to continue to honour their payroll responsibilities to staff.
"It's good news for the retail and hospitality industry in particular with premises, which will get cash they don't have to re-pay. It will delay at the very least, difficult decisions.
"What we don't want to see is for businesses that would not otherwise survive being artificially propped up based on debt such at the new Business Interruption Loan. I wonder if this might have been better if we'd done what France announced around longer terms to pay tax and certain bills.
"It's a shame there was nothing on insurance for the self-employed or sole traders that are losing contracts with no financial support whatsoever."
In other announcements, the controversial IR35 off-payroll changes, due to come into force next month, will be delayed until April 2021. Ministers argue that the reforms clamp down on a tax loophole used by self-employed people working through a company.
Meanwhile, housing secretary Robert Jenkin said planning rules are being relaxed so all pubs, restaurants and cafes can offer takeaway and delivery services.
We will keep you updated on how to access the government's coronavirus business support, so keep an eye on this post and Enterprise Nation's Twitter account.
If you have any questions or would like to share your experiences accessing the government's coronavirus business support, connect with me on Enterprise Nation.