As we have said before in updates earlier in the week, in times like these, we cannot emphasise enough the importance of communication. We have a specific focus on maintaining effective communication with our clients, and all in Cornwall, getting information to you that will help you and your business in these uncertain times.
We are committed to attempting to disseminate information and advice as soon as more information is released from government.
The Chancellor has this evening made some more unprecedented announcements, and on the face of them, they seem to be something like the dramatic intervention that many had been hoping for to mitigate the critical impact the situation is having on the economy.
The Chancellor made a number of announcements building on those that were announced on Tuesday, by way of a reminder these included:
- Interest-free business interruption loans – these were announced in last week’s Budget. However, these loans will be increased to £5m, up from the £1.2m announced last week. These loans are not yet operational and details have not yet been released, but the Chancellor announced yesterday that these should be operational shortly – see the British Business Bank’s website here for the latest information. In today’s speech, the Chancellor explained these loans would be available from Monday and would now be interest-free for 12 months – increased from the 6 month period initially announced;
- Business rates holiday extended – A one year business rate holiday for those in the retail, leisure and hospitality sectors i.e. a 12-month business rates holiday for all shops, hotels, pubs, theatres, music venues, restaurants and any other hospitality or leisure businesses;
- It was announced that cash grants of up to £25,000 will be available for businesses in the above sectors with a property with a rateable value of between £15,000 – £51,000;
- Cash grants of up to £10,000 will be available to businesses who are currently eligible to claim small business rate relief. This has increased from the £3,000 maximum announced in last week’s Budget;
- Finally, it was announced that a three-month mortgage holiday will be brought in for those in difficulty as a result of the situation. It was subsequently announced yesterday that this would also apply to buy-to-let landlords.
Many, did not view these measures as going nearly far enough, calls being to help businesses with wage costs. Thus prompting the further announcements this evening.
In his speech this evening, Rishi Sunak announced that:
- Coronavirus Job Retention Scheme – The State would pay grants covering up to 80% of the salary of workers if businesses kept employees on their payroll, rather than lay them off.
- The payments will be worth up to a maximum of £2,500 per month, per employee, initially for 3 months (however, Sunak was quick to announce that he was prepared to extend this period – which you’d have to assume will be required);
- The payments will be backdated to 1 March;
- Crucially, the scheme will be available for all employers;
- The scheme will be operated by HM Revenue & Customs;
- Sunak announced that he expected the Scheme to be up and running in a matter of weeks, said the amount of funding for the Scheme is unlimited, and said that detailed guidance will be published shortly;
- VAT deferral – the next quarter of VAT payments is being deferred for all businesses. This will only be payable at the end of the financial year;
- July 2020 self-assessment payment deferred – the 2019/20 2nd payments on account that ordinarily has a payment deadline of 31 July 2020, has been deferred until 31 January 2021;
- Measures also included self-employed people being able to access universal credit up to the value of statutory sick pay.
The Coronavirus Job Retention Scheme appears hugely significant for worried businesses, and I think fair to say that it exceeds expectations.
The detail is obviously very limited at this stage, however, again, we feel that it is of huge value to provide advice in real-time in a situation like this, providing you with the necessary information to enable you to make informed decisions. Latest government guidance can be found here.
As we have said previously, we anticipate posting updates such as this much more regularly than we historically have done, again due to the rapidly changing situation. As soon as more information is available from the government we will provide updates.
Echoing previous messages, but important to do so, we are evaluating with clients where they envision a significant business cost, disruption or failure in the worst case, and are assisting in the development of action plans and strategies to mitigate the risks based on the information available. Please get in touch with your usual RRL contact if you require similar assistance and advice.