Coronavirus – How will it affect SMEs & what steps can you put in place?
With the growing Coronavirus crisis on our hands, it is predicted that a fifth of the workforce will be off sick at any one time. To combat the imminent challenge facing the UK, the Bank of England and the Chancellor announced yesterday that they will be introducing a package of measures specifically aiding small businesses to manage the impact that the outbreak will likely cause…
“A bridge for businesses”
The Chancellor made clear how important it was to provide a ‘bridge for businesses’ and has put together a £30bn package to combat Coronavirus.
Supportively all those advised to self-isolate will be entitled to statutory sick pay even if they have not had any symptoms and will be able to obtain a sick note via the NHS 111 phone service from day 1. In order to dilute the costs for businesses, companies with less than 250 employees will be refunded in full for any sick pay payments paid in connection with Coronavirus for up to 14 days.
Self-employed workers who are not eligible for SSP will be able to claim contributory Employment Support Allowance, which will be available immediately rather than after 1 week as it currently stands.
Business rates in England have also been scrapped for businesses within the retail, leisure and hospitality sectors with a rateable value below £51,000, helping businesses navigate the uncertain times that lie ahead.
Are you eligible for the £3,000 grant available?
Small businesses who are already in receipt of 100% business rates relief will have access to a £3,000 cash grant. With the aim to cushion the blow of COVID19, this will be available to 700,000 of the smallest businesses and worth a total of £2 billion.
Interest rates cut to support firms & Banks offering extended loans
Small firms will be able to access “business interruption” loans of up to £1.2m and interest rates will be reduced from 0.75% to 0.25%, taking borrowing costs down to the lowest level in history. Along with the promise by the government to free up £100bn of extra lending power to help banks support businesses seeking loans.
Banks are also following in the Governments support to the outbreak by offering extensions to loans with RBS being the first to offer more flexibility on loans to businesses. Barclays have also discussed offering a 12-month capital repayment holiday on existing loans over £25,000, and the offer to extend or provide overdraft facilities to their business customers.
Time to Pay Agreements
The government has also committed to ensure that businesses and self-employed individuals in financial distress with outstanding tax liabilities will receive support with their tax affairs.
HMRC has set up a dedicated COVID-19 helpline to help those in need, they may be able to agree a bespoke Time to Pay arrangement. Time to Pay gives businesses a time-limited deferral period on HMRC liabilities owed and a pre-agreed time period to pay these back.
If you would like any help with loan discussions with your bank, time to pay agreements with HMRC or further advice on any of the other potential benefits available to SMEs mentioned, please contact us on 0161 249 5040 or email firstname.lastname@example.org