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This is a very fast-moving issue and information should be read as correct at the date of publication (15 January 2021). We would nevertheless recommend checking information with primary sources to ensure that it’s up to date.

In a worst-case scenario, it was feared that up to one fifth of UK employees might have been absent from work during the initial coronavirus outbreak. This would have had major economic impacts for the UK. This briefing provides information on the various sources of support for businesses affected. Please note that there may be further support schemes for specific sectors that are not covered here.

Pre-existing Government support schemes for businesses may be of help to firms. More information about these is available in our 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. 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 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. The scheme was extended to larger businesses from 20 April. A simplified scheme, Bounce Back Loans, launched on 4 May.
  • 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 initially for 3 months to 30 June 2020 but since extended to 31 December and then to the end of March 2021.

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 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), 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. These included a new Job Support Scheme, continuation of the Self Employment Income Support Scheme and various tax arrangements, and measures to extend the term of business loans schemes.

But the return of more severe restrictions later in the year led to further policy updates – including the retention of the Coronavirus Job Retention Scheme and extension of arrangements for business loans and for the self-employed. The Government also introduced new schemes that provide funding to local authorities in England to support businesses.

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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