Coronavirus: Support for businesses

In a worst-case scenario, up to one-fifth of UK employees may be absent from work during the coronavirus outbreak. This would have significant economic impacts in the UK. This briefing provides information on the various sources of support for businesses affected. It also details some international comparisons.

This is a fast-moving issue and should be read as correct at the time of publication.

In a worst-case scenario, up to one-fifth of UK employees may be absent from work during the coronavirus outbreak. This would have significant economic impacts in the UK. This briefing provides information on the various sources of support for businesses affected.

Pre-existing Government support schemes for businesses are available and may be of help to firms. More information about these can be found in Library briefing Access to Support for Small Firms.  

Advice and information for affected businesses is provided in a number of different places. The Government has:

• Created a website with detailed guidance on the different support measures available to businesses.
• set up a dedicated team, led by the Department for International Trade (DIT) and UK Export Finance (UKEF), to offer:
  • supply chain support
  • help for businesses with cash flow problems

The Confederation of British Industry (CBI) has created an online hub to assist businesses in dealing with the impacts of coronavirus, with ACAS producing similar advice for employers. The Federation of Small Businesses (FSB) has published their own advice, which includes information about the help members of the FSB can call on during the outbreak.

Since the coronavirus outbreak reached the UK, the Government announced plans for a £330+ billion package of support for businesses, including:

• A Coronavirus Job Retention Scheme that will see HMRC pay 80% of “furloughed” workers’ wages, up to a £2,500 per month cap for at least three months.
• A Self-Employment Income Support Scheme that will pay self-employed individuals up to 80% of their profits for three months, up to a £2,500 per month cap.
• A new Coronavirus Business Interruption Loan Scheme that will see banks offer loans of up to £5m to support SMEs. The Government will cover the costs of interest on these loans for the first six months.
• Scaling up HMRC Time To Pay service, allowing businesses and the self-employed to defer tax payments over an agreed period of time.
• Tax deferments on both self-assessment tax returns and the quarterly tax return for 20 March-30 June.
• Statutory Sick Pay (SSP) costs for businesses with fewer than 250 employees will be met by the Government in full for up to 14 days per employee.
• Business Rate Relief for all businesses in the retail, hospitality or leisure sector in England, for one year in 2020-21. Eligible pubs will also be entitled to a business rate discount of £5,000.
• Cash grants worth:
  • £25,000 to the smallest businesses in the retail, hospitality or leisure sector.
  • £10,000 for all business in receipt of Small Business Rates Relief (SBRR) and Rural Rates Relief.
• The Covid 19 Corporate Financing Facility (CCFF) for large businesses.
• Provisions to prohibit forfeiture of a lease for non-payment of rent for 3 months to 30 June 2020. This applies in England, Wales and Northern Ireland. The period may be extended.

The Bank of England has reduced the base rate to 0.1%, enabled an expansion of low-cost credit to businesses through the CCFF and the Business Interruption Loans Scheme, reduced the UK countercyclical capital buffer rate (which the Bank estimates will allow banks to lend up to £190 billion more to businesses), and has advised banks not to increase dividends or bonuses in response to the other actions announced.

Insurance arrangements for businesses are complex and cover a number of areas. The Association of British Insurers advises businesses to check their cover and to discuss concerns with brokers. Few companies are likely to have pandemic business interruption coverage (whether related to Government orders to close down or notifiable illnesses). The Government advises others to take up the other support measures on offer.