Covid-19 – Options available for struggling businesses and households


19th March 2020

COVID-19 is going to have a big impact on the financial affairs of millions of businesses and households across the UK. Many will already be feeling that their personal or business finances are not robust enough to survive the coming weeks or months.

On 17 March 2020, the Chancellor of the Exchequer announced a raft of measures designed to minimise the economic impact of the virus. These measures were announced in addition to various handouts and concessions made in the Chancellor’s first budget, delivered only days before.

In this post, we set out the options available to clients and contacts who may be concerned about their financial situation. The situation is likely to change on a regular basis and we shall attempt to keep this advice as up to date as possible.

Individuals

  • Statutory sick pay (“SSP”), payable from 1 day, available for anyone diagnosed with COVID-19 or self-isolating in line with government advice
  • Those not eligible for SSP (e.g. self-employed), the rules for claiming Universal Credit or Contributory Employment and Support Allowance will be relaxed
  • HMRC will, where appropriate, provide further “time to pay” on outstanding tax liabilities (dedicated helpline available)
  • Council tax relief available via a Hardship Fund (details pending)
  • Mortgage repayment holidays of up to 3 months by some lenders
  • Self-assessment income tax payments for July 2020 deferred for 6 months.

All businesses

Small businesses

  • Refunds for SSP payments of up to 2 weeks per eligible employee (businesses with fewer than 250 employees)
  • Local Authority grants of up to £10,000 available to businesses eligible for Small Business Rate Relief or Rural Rate Relief
  • Unsecured loans of up to £250,000 available from some banks

Retail, hospitality & leisure businesses

  • 100% business rates holiday for 12 months (pubs’ business rates discount increased to £5,000)
  • Relaxation of planning regulations to permit pubs and restaurants to provide takeaways
  • Grants of up to £25,000 to retail, hospitality and leisure businesses operating from smaller premises with a rateable value of £15,000-£51,000

Judging by conversations that our Business Restructuring & Insolvency team have been having with their local business communities, the above measures are welcomed but are not enough. Our team will be available throughout the crisis to give advice to any concerned clients or contacts on any steps that they can take to ease the financial pressures brought about by the virus.

We work closely with our Employment team, who are advising employers on what steps they can take to manage what we hope to be a brief temporary challenge to their payroll. We also work closely with qualified insolvency practitioners who can advise on how to scale back your operations and attempt to ride out the storm.

Your contacts are:

This article was originally published on 19 March 2020, with a latest update on 23 March.

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