Yesterday during the daily coronavirus conference the Chancellor Rishi Sunak announced emergency measures that are being put into place for SMEs across the UK. Stating that this time is now an economic emergency he announced £330 billion worth of financial support will be made available. This will come in different forms including loans, grants, and tax relief for SMEs. So what are the measures being put in place?
A particular issue facing businesses during this time period is cashflow, being able to stay afloat during an economic downturn is incredibly difficult regardless of whether you are B2C or B2B. If the public are not buying in the same pattern as before it becomes hard to predict what cashflow will look like, which aside from direct B2C impact also creates uncertainty in supply chains. To combat this the government has announced the availability of cashflow loans, low interest rate loans over the course of one year. There are questions around the decisions for businesses to take on more debt during this time, but the aim of the package is to provide the stability in company cashflow: meaning wages and suppliers can still be paid and businesses can stay afloat.
Statutory Sick Pay (SSP) will also be provided a relief package. As productivity across the country is going to fall this is again enabling businesses to stay on top of cashflow issues. SSP can be a huge outlay for businesses, especially as it may be a significant percentage of staff at any given time. According to Gov.uk there will be no need for GP’s sick notes, and relief will be offered to cover employees off sick for up to two weeks.
Companies funded by banks will also be receiving support through the Coronavirus Business Interruption Loan Scheme. This scheme will provide 80% guarantor cover to banks through the government. Covering loans of up to £1.2 million. Again the goal here is to enable the continued funding of SMEs across the UK, which currently makes up 97% of businesses.
Business rates are also being supported through a number of schemes. Those companies who qualify for Small Business Rate Relief, or Rural Rate Relief, will be able to access grants of up to £3,000 from their local authority. Applications for this will begin in April. Retail, hospitality and leisure companies who do pay business rates but are under £51,000 rateable value may qualify for 100% discount for 2020/21 tax year, and will be rebilled for 2019/20 as soon as possible.
Payments for tax may also be eligible for the Time to Pay service available through HMRC, the best number to contact HMRC if you are concerned about tax is through 0800 0159 559.
We are in uncharted territory now
On top of all this business relief, totally 15% of UK GDP, restaurants are being encouraged to offer increased takeout services, supermarket delivery restrictions are already being lifted and additional measures are being considered for those in the hospitality and leisure sectors.
At Hethel Innovation we are now operating under a remote working policy, but we are incredibly aware of the difficulty business will be experiencing during this time period and so it’s worth reiterating we are here to help! Get in touch if you want to talk about any of these measures or you would like more guidance on your business.