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This is a very fast-moving issue and information should be read as correct at the date of publication (24 June 2021). We would nevertheless recommend checking information with primary sources to ensure that it’s up to date. There may also be further sector-specific support available – so please check if necessary.

This briefing provides information on the various sources government support schemes for businesses affected by the pandemic, as well as the response of the insurance industry. Please note that there may be further support schemes for specific sectors that are not covered here.

Earlier government support schemes for businesses may also be relevant. You can find out more in our briefing Access to support for small firms. The Government has created a website with detailed guidance on the different support measures available to businesses. It has also set up a dedicated team, led by the Department for International Trade (DIT) and UK Export Finance (UKEF), to offer supply chain support and help for businesses with cashflow problems.

Early in the pandemic the Government announced plans for a £330+ billion package of support for businesses, including:

  • A Coronavirus Job Retention Scheme that would 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 would pay self-employed individuals up to 80% of their profits for three months, up to a £2,500 per month cap.
  • A Coronavirus Business Interruption Loan Scheme that would see banks offer loans of up to £5m to support SMEs. The Government covered the costs of interest on these loans for the first six months. The scheme was extended to larger businesses from 20 April 2020. A simplified scheme, Bounce Back Loans, launched on 4 May. These schemers ended on 31 March 2021 and were replaced by the Recovery Loan Scheme.
  • 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 would 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.
  • The Covid 19 Corporate Financing Facility (CCFF) for large businesses.
  • Provisions to prohibit forfeiture of a lease for non-payment of rent initially for 3 months to 30 June 2020 but since extended.

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

Insurance arrangements for businesses are complex and cover several 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), although the level of those who do is still uncertain and policy wording may be open to challenge. The Government advises those not eligible to claim to take up the other support measures on offer.

Several months into the pandemic, the Government made changes to corporate insolvency and governance arrangements to help businesses to focus on operation and survival.

Later still the Chancellor announced the Eat Out to Help Out scheme to help support eat-in dining.

The Government made further announcements on 24 September through the Winter Economy Plan. Over the course of the following months, various schemes were amended or extended.

The continuing situation meant that dealing with the consequences of the pandemic was the main focus of the 2021 Budget.

All our briefings on coronavirus are listed on the Commons Library coronavirus page. This briefing also signposts relevant Library publications and other sources throughout.

Information about spending on many of the main schemes appears in Coronavirus business support schemes: statistics.

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