What Support Measures are Offered for UK Businesses Against the Coronavirus

Photo: Small business UK

As the UK is entering the second phase of fighting the Covid-19, the unprecedented measures are already impacting the country's businesses. With venues pulling down shutters, airports ready to shut down "within weeks", and the public encouraged not to get together in pubs and restaurants, along with the health concerns, the UK business owners are finding themselves in a desperate scenario. 

The government advice and self-isolation has forced many businesses to close their doors. The fear of the virus continues to have a devastating effect on the UK's economy, with companies facing a nearby future of uncertainty. 

During the Budget 2020 speech, Chancellor Rishi Sunak said that the government is prepared to contain the impact, which while significant, is temporary. "On the supply side, the right response is to provide a bridge for businesses, to ensure that what is a temporary impact on our productive capacity does not become permanent.", he said. 

Here are some important measures that have been implemented in support of businesses in the UK. 

1. HMRC Time to Pay Agreements 

HMRC has set up a helpline to give more information on options for paying HMRC in installments for businesses affected by Coronavirus. All companies with outstanding tax liabilities may be eligible to receive support through HMRC's Time to Pay agreements. 

There is over 200 staff ready to offer advice and support on delaying the payments. Businesses are encouraged to contact HMRC through their helpline number if you have missed a payment or are worried about a future payment. 

2. Economic Rescue Plan Through deferring VAT and Income Tax Payments

The Chancellor outlined a £6bn of extra support for the welfare system in the country. The government has initiated schemes to cover 80% of salaries of retained workers, up to £2,500 a month. Businesses impacted can also defer the next quarter of VAT payments. 

Income Tax Self-Assessment payments due in 2020 will also be deferred until January 2012. If you can't pay your tax bill on time, note that the offer applies to everyone, with no requests needed. 

3. Retail and Hospitality Grant Scheme

The hospitality industry is one of the most affected market areas. The scheme is applicable to businesses in retail, hospitality and leisure sectors eligible for a cash grant up to £25,000 per property. This amount is offered to those with a rateable value of between £15,001 and £51,000. 

For those of rateable value under £15,000, a grant amount up to £10,000 would be issued. This applies to self-catering accommodation, cinemas, and live music venues as well.  

4. Interest-free Loans with Coronavirus Business Interruption Loan Scheme

The British Business will launch the Interruption Loan scheme by next week to support the small and medium-sized businesses to access bank loans and overdrafts. The government will offer lenders with an 80% guarantee on each loan, to give lenders confidence to continue providing finances to businesses. The scheme will support lending amounts up to £5 million in value. 

The first 12 months of this financing would be interest-free, and the government will cover the interest rates for the first year. Businesses with a turnover of less than £45 million per year and upon meeting the British Business Bank eligibility criteria have access to this scheme.  

5. Emergency Loans from Retail Banks 

Many high street banks have also made provisions to help their business customers. Measures to offer emergency work capital, delaying loan payments and other loan facilities are in focus on assistance. This is particularly applicable to businesses affected by supply chain disruptions from China and is waiting for client payments from overseas. 

However, banks such as HSBC have extended the measures to individuals as well. There are also options for extending the remaining term for the mortgage, and temporary increase in credit card and overdraft limits. Other prominent banks proceeding in the same direction include the Bank of Ireland, Natwest. And Lloyds. 

How to Protect your Business?

Tackling the rising economic crisis is already of substantial significance to the government. In the upcoming weeks, we can hope for an improvement in the situation and further measures that will protect industries and safeguard jobs. 

Do not hesitate to take advantage of these government programs and make sure that you get advice from the experts to get the most benefit from their guidance.