An overview of the Government initiatives to support businesses through the coronavirus pandemic.
There will be a Westminster Hall debate on “Support for SMEs during the Covid-19 pandemic” on Tuesday 10 November 2020. The debate will be moved by Elliot Colburn, MP for Carshalton and Wallington.
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 for 3 months to 30 June 2020 (since extended to 31 December in England and Wales).
The initial 3 month prohibition and extension to 30 September applied in England, Wales and Northern Ireland.
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.
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.
1)Library Publications – See also the Commons Library Coronavirus page
Coronavirus: Support for businesses, 6 November 2020
Coronavirus business support schemes: statistics, 26 October 2020
Coronavirus: Economic impact, 22 October 2020
Coronavirus: Self-Employment Income Support Scheme, 6 November 2020
FAQs: Coronavirus Job Retention Scheme, 16 June 2020
Coronavirus: Business loans schemes, 3 November 2020
IMF, Covid-19 and SME failures, IMF Working Paper, 16 September 2020
USA Small Businesses and Covid-19: Relief and Assistance Resources, US CRS, 5 October 2020
Pressure grows to support excluded self-employed, Financial Times, 6 November 2020
Covid help extended for self-employed people, but some miss out, The Guardian, 6 November 2020
Independent businesses in Britain are coping with Covid better than big chains, data show, Financial Times, 4 November 2020
COVID-19: a catalyst for change amongst SMEs Paragon Bank, 4 November 2020
Self-employment income support and the second national lockdown, Institute for Fiscal Studies, 3 November 2020
Entrepreneurship and Covid-19: an assessment of the short- and long-term consequences for UK small businesses, King’s Business School, September 2020
There will be a Westminster Hall debate on access to and acceptance of cash during and beyond the Covid-19 pandemic on Thursday 3 December at 1:30 pm.
This House of Commons Library briefing paper outlines the measures taken in England to support rough sleepers, and those at risk of rough sleeping, during the coronavirus (Covid-19) outbreak. It discusses the impact of these measures and stakeholder comment.