The Chancellor Rishi Sunak has announced a raft of financial measures to shore up the economy throughout the coronavirus impact. Andrew Diver, head of tax at Beatons, looks at how the package will help businesses and individuals.
Businesses across the country are rapidly heading towards crisis point as the impact of social isolation has already been felt. People are staying away from the retail, leisure and hospitality sectors after heeding the Prime Minister’s advice to avoid going to pubs, clubs and theatres. Although he stopped short of completely ordering them to close their doors to customers.
The Chancellor has confirmed that insurers of those retail, leisure and hospitality businesses will pay out as if the government has compelled them to close – a welcome boost to those worrying about their future viability.
Sunak has unveiled a £330billion package of support measures to help businesses through the coronavirus crisis – a package equivalent to 15% of the UK’s GDP.
Measures include a new lending fund to increase liquidity for larger businesses as well as an increase to the business interruption loan scheme for SMEs which was announced in the Budget last week. The available loans have been increased from £1.2million to £5m with interest-free terms for the first six months and should be available from next week.
The Chancellor also announced an extension to the business rates holiday to all businesses in the retail, leisure and hospitality sector companies, irrespective of their rateable value. It means that not one single business in this sector will have to pay business rates for 12 months.
There is welcome extra assistance for businesses who cannot benefit from the business rates holiday with cash grants available from the local authority from April between £3,000 and £25,000.
For homeowners with mortgages, lenders will be offering a three-month mortgage holiday to those facing difficulty in making their monthly payments throughout the coronavirus pandemic.
This will provide people with some breathing space although when payments are resumed, the amount will be slightly higher as the missed interest payments will be added to the mortgage.
The PM and Chancellor have both said that the government “will support jobs, will support incomes and support businesses. We will do whatever it takes”.