Coronavirus - Business Support Update.

Business support Update - 19th March 2020

The Welsh Government have finally drawn together their plans having received an initial £475 million from the Chancellor of the Exchequer. There will no doubt be further announcements made from both the Welsh Government and the UK Government and I will endeavour to update you whenever I can.

Any business can contact the Business Wales telephone helpline on 03000 603000. They are the “one stop shop” who can help on any business issues and will be able to provide the very latest information, and practical advice – from staffing to financial planning as well as supply chain support.

This week the Chancellor of the Exchequer, Rishi Sunak MP, released a £350-billion package to help bolster the UK economy, with the indication that more might be released if the need arises.

The package of support includes unlimited loans and guarantees to support firms and help them manage cashflows through this period. This is in addition to the £30 billion of support announced in the Budget to deal with the crisis by investing in public services, increasing support for vulnerable people and providing business with tax reliefs and loans.

To ensure that businesses have access to the funds they need, the UK Government are:

  • Providing support for liquidity amongst large firms, with a major new scheme being launched by the Bank of England to help them bridge Coronavirus disruption to their cash flows through loans
  • Increasing the amount businesses can borrow through the Coronavirus Business Interruption Loan Scheme from £1.2 million to £5 million, and ensuring businesses can access the first 6 months of that finance interest free, as Government will cover the first 6 months of interest payments. This will be available to businesses in Wales via the British Business Bank.
  • Including new legal powers in the Covid Bill enabling the UK Government to offer whatever further financial support is necessary to support businesses

In Wales:

The UK Government’s Covid19 support package will see £1.4 billion extra given to the Welsh Government to deal with the outbreak. This is on top of the nearly £1.5 billion extra that the UK Government is investing in Wales after increased spending in England for 2020/21.

The Welsh Government confirmed that retail, leisure and hospitality businesses with a rateable value of £51,000 or less will receive 100% business rate relief and pubs with a rateable value of between £51,000 and £100,000 will receive a £5,000 reduction on their bill. This will take place from April (the 2020/21 financial year) for 12 months.

The Welsh Government has also already announced a package of support worth more than £200 million for small businesses to help them during the coronavirus outbreak, making full use of the consequential funding for Wales resulting from announcements in the UK Government’s Budget on March 11th.

We are now awaiting more information on how the Welsh Government will pass on the Chancellor’s recent package of support which equates to an extra £1.4 billion.

The Welsh Government has informed us that the Development Bank of Wales has equity and loan funding which it can make available to otherwise healthy small businesses to help them through the cash flow and other challenges which they will face in the next few difficult weeks and months. The Development Bank of Wales will also give a three month capital repayment holiday to the businesses it supports.

With regards to the statutory sick pay, the UK Government is bringing forward legislation to allow small and medium sized businesses and employers to reclaim statutory sick pay due to the Coronavirus.

Business Wales now has a dedicated coronavirus advice page:

SNAPSHOT

WELSH GOVERNMENT WILL;

Retail, Leisure and Hospitality Industry

  • Give all businesses 100% business rate relief
  • Rateable Value £12,001 to £51,000 a GRANT of £25,000

Pubs

  • Rateable Value of £51,000 to £100,000 can apply for a £5k reduction in business rates

All Businesses

  • If Rateable Value under £12,000 and currently receiving SBRR are eligible for a grant of £10,000

 

UK GOVERNMENT WILL;

SMEs under 250 employees

  • 2 weeks SSP per employee with Covid-19

Larger Businesses

  • Bank of England Covid-19 corporate financing facility

ALL Businesses and the Self-Employed

  • HMRC Time to Pay service

 

Business Support Covid-19

The Chancellor was very clear when setting out Westminster’s economic response to the Covid-19 pandemic in his Budget Statement. The areas below are initiatives which I understand would be applicable across the UK or will provide benefit to the whole of the UK such as Research & Development.

Public services:

  • We will provide any extra resources needed by the NHS and other public services to tackle the virus. We have created a new £5 billion Initial COVID-19 Response fund so the NHS can treat Coronavirus patients; councils can support vulnerable people; and ensure funding is available for other public services. This sum will enable Barnett Consequential which will give the Welsh Government funding to deploy to the Welsh NHS
  • £40 million of new funding to enable further rapid research into COVID-19 and increase the capacity and capability of testing and surveillance.
  • A contribution of up to £150 million to the International Monetary Fund’s Catastrophe Containment and Relief Trust, to help the effort to stop further transmission, including into the UK.

Initiatives from the Department of Work & Pension which is non-devolved.

  • Statutory Sick Pay (SSP) will be now be available for eligible individuals diagnosed with COVID-19 who are unable to work because they are self-isolating. This is in addition to the change announced by the Prime Minister that SSP will be payable from day 1 instead of day 4 for affected individuals.
  • People who are advised to self-isolate will now soon be able to obtain an alternative to the fit note to cover this by contacting NHS 111, rather than visiting a doctor. This can be used by employees where their employers require evidence.
  • Those who are not eligible for SSP, can now make a claim for Universal Credit or an enhanced Employment and Support Allowance:
  • For the duration of the outbreak, the requirements of the Universal Credit Minimum Income Floor, will be temporarily relaxed for those who have COVID-19 or are self-isolating according to government advice.
  • People will be able to claim Universal Credit and access advance payments upfront without the current requirement to attend a jobcentre if they are advised to self-isolate.
  • Employment and Support Allowance, up to a maximum of £111.65pw, will be payable for eligible people affected by COVID-19 or self-isolating from Day 1 of sickness, rather than Day 8.

 

Supporting businesses experiencing increases in costs or financial disruptions:

  • We will bring forward legislation to allow SMEs and employers to reclaim Statutory Sick Pay (SSP) paid for sickness absence due to COVID-19. This refund will cover up to two weeks’ SSP per eligible employee who has been ill because of COVID-19; Employers with fewer than 250 employees will be eligible; Employers will be able to reclaim expenditure for any employee who has claimed SSP as a result of COVID-19. We will work with employers over the coming months to set up the repayment mechanism for employers as soon as possible.
  • Businesses and self-employed people in financial distress may be eligible to receive support with their tax affairs through HMRC’s Time To Pay service. Arrangements are agreed case-by-case. Businesses can contact HMRC’s new dedicated COVID-19 helpline from 11 March 2020 for advice

England have implemented the following

  • An increase the Business Rates retail discount to 100% for one year and expand it to the leisure and hospitality sectors, and the introduction of a £5,000 rates discount for pubs. Taken together with existing Small Business Rates Relief an estimated 900,000 properties, or 45% of all properties in England, will receive 100% business rates relief in 2020/21. Guidance for local authorities on the application of the expanded retail discount will be published by MHCLG on 20 March.
  • An additional £2.2 billion funding for Local Authorities to support small businesses that pay little or no Business Rates because of Small Business Rate Relief.
  • A new temporary Coronavirus Business Interruption Loan Scheme, delivered by the British Business Bank, will launch on 1 April to support businesses to access bank lending and overdrafts.
  • £500m more funding so Local Authorities can support economically vulnerable people and households. We expect most of this funding to be used to provide more council tax relief, either through existing Local Council Tax Support schemes, or through complementary reliefs. MHCLG will set out more detail on this funding, including allocations, shortly.

Scotland have implemented the following

  • 75% relief for retail, hospitality and leisure businesses with a rateable value below 69K
  • £80 million grant pot to enable grants of £3,000+ for SMEs affected by Covid-19
  • 1.6% rate relief on all Scottish properties
  • 5K relief for Pubs with a value below 100K

Wales have implemented the following

They have received £475 million from UK for Coronavirus but are yet to announce any plans for the money.

The Welsh Conservatives are pressing the Welsh Government urgently on this matter.