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How is the government helping businesses during the coronavirus (COVID-19) outbreak?

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Understanding government support schemes for businesses during COVID-19

Rishi Sunak’s debut budget speech on March 11th 2020 was delivered under the shadow of the threat posed by the developing COVID-19 coronavirus crisis as the impact of the global pandemic began to be felt by businesses up and down the country. Labelled by some as a ‘coronavirus budget’ Sunak announced a raft of measures to help stabilise the economy by offering companies various lifelines as they battled against the escalating situation. These included help with emergency funding as well as business rates relief for small companies.

Following on just days from the budget, Rishi Sunak was once again back in the spotlight detailing further measures to help beleaguered businesses including the popular Coronavirus Job Retention (or 'furlough') Scheme, government-backed loans including CBILS and Bounce Back Loans, as well as a number of tax deferral options. 

However, as time has gone on, these measures and stimulus schemes have gradually been phased out. The furlough scheme has ended, Bounce Back Loans which were taken out by many businesses at the start of the pandemic now need to be repaid, and plans need to be put in place to bring any deferred tax liabilities up to date.

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While the raft of financial support measures have decreased, there are still some channels of government help available for certain businesses:

  • Recovery Loans Scheme - The Recovery Loans Scheme was announced at the 2021 Budget and is designed as a direct replacement for the CBILS and Bounce Back Loan schemes. Small and medium-sized businesses can apply for a loan of up to £2m. The government will provide 70% security to the lending banks and personal guarantees will not be required for borrowing under £250,000. Applications will close at the end of June 2022.
  • HMRC Time to Pay (TTP) Scheme Extended - Sunak has thrown a lifeline to those companies who fear being able to keep up with their obligations to HMRC during this time of upheaval. This will be done through an extension of the current Time to Pay (TTP) scheme which gives businesses additional breathing space when settling their tax bills including VAT, PAYE, and Corporation Tax. 
  • VAT Reduction - Qualifying businesses within the hospitality, hotel accomodation, and public attractions industry may be eligible for a 12.5% reduced rate of VAT until 31 March 2022.
  • Business Rates Holiday - Businesses within the retail, hospitality, and leisure industries may be entitled to a 66% reduction on their business rates for the period 1 July 2021 to 31 March 2022, up to a maximum benefit of £2m. Qualifying businesses must operate from a premises, which may include a shop, restaurant, pub, cinema, live music venue, gym, hotel, or other accomodation property. You should contact your local council if you believe you may qualify for this relief.

Please note: this is not an exhaustive list of measures; additional schemes and grants may be available to qualifying businesses in certain sectors.

 

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