Chancellor Rishi Sunak announced a raft of measures today to support small to medium businesses affected by Covid-19, which he said would ‘protect the vast majority of businesses through the worst’.
He announced a ‘significant step’ by the Government, promising to refund the full cost of Statutory Sick Pay relating to Covid-19 for up to 14 days to businesses with under 250 employees.
The government also announced the launch of a temporary Coronavirus Business Interruption Loan Scheme, delivered by the British Business Bank. The government will provide lenders with a guarantee of 80% on each loan (subject to a per lender cap on claims) to give lenders further confidence in continuing to provide finance to SMEs. The government will not charge businesses or banks for this guarantee, and the Scheme will support loans of up to £1.2 million in value. This new guarantee will initially support up to £1 billion of lending on top of current support offered through the British Business Bank.
Businesses with outstanding tax liabilities will receive extra support thanks to a dedicated Covid-19 helpline and bespoke ‘Time to Pay’ arrangements, similar to those implemented following widespread flooding and the financial crisis. HMRC will also waive late payment penalties and interest where a business experiences administrative difficulties contacting HMRC or paying taxes due to the virus.
Dave Miller, client account manager at Spicerhaart Corporate Sales, said:
“These measures will go a long way to helping small businesses hit by the spread of Covid-19. Taken together with the loan guarantee scheme also announced by the Chancellor, and the payment holidays announced by major lenders, a lot of businesses will live to fight another day who might otherwise have gone under.
“That’s a very welcome first step and timely, too, as the coronavirus is already beginning to hit hard.
“There will still be many businesses and individuals who, through no fault of their own, find themselves facing financial difficulty as a result of the coronavirus. It is important that lenders of all descriptions adopt as flexible a stance as possible to deliver fair customer outcomes.”