The Chancellor has announced additional aid for businesses to help them through disruption caused by the Coronavirus. We can’t find a lot of the detail about the proposals announced because they probably haven’t been finalised yet.
Here is our summary of measures which might affect our clients:
Making available £330 billion of guarantees so that participating banks can advance money to businesses with cashflow problems.
According to the statement, the first six months interest on such a loan will be paid by the government. That is good news.
What isn’t clear is whether the government will be guaranteeing 100% of the loan or just 80%, which is the current arrangement. If it is 80% then banks will probably want to carry out checks to ensure their 20% is safe – so the process of obtaining such a loan may not be as quick and painless as hoped.
All retail, hospitality and leisure businesses will have a 100% business rates holiday.
This improves the previous announcement where only businesses with a Rateable Value of less than £51,000 would be entitled to a holiday. We can immediately think of businesses where this will reduce costs by over £20,000. Good news.
Increasing grants from £3,000 to £10,000
Last week it was announced that businesses eligible for Small Business Rate Relief would receive a grant of £3,000. This grant has been increased to £10,000. This is good news for many businesses.
Additional £25,000 grant for certain businesses
Retail, hospitality and leisure businesses operating from premises with a rateable value over £15,000 and below £51,000 will be entitled to a further £25,000 grant.
Because the measures above are related to business rates, we assume (although not confirmed) that these will be administered by the local authority. We think they should be automatic and probably won’t require an application to be made (but we could be wrong).
HMRC will need to communicate with the local authorities to define the detail and how local authorities will receive the necessary funding from the Treasury. Don’t expect that this will be extremely quick. You may have to wait a while.
Apparently mortgage lenders will support customers with payment holidays of up to 3 months. This isn’t really new and some lenders seem happy to consider longer payment holidays. The catch might be that interest will still accumulate and will need to be repaid at some point.
Further measures may be announced as time goes by. We will try to keep you informed by posting the main points on our website.
All of our clients are welcome to contact us, if only for moral support. Our number is (01509) 816150 – or you can use the form below or email a member of staff. We aren’t being given any additional information but we are in contact with other clients and advisers and can, occasionally, glean extra information.