COVID-19 – Latest UK Government Support Measures
The Government has announced a substantial emergency package to support the long-term survival of UK businesses. It is essential that businesses are aware of the support packages made available by the Government and that they obtain support quickly in order…
Blog24th Mar 2020
The Government has announced a substantial emergency package to support the long-term survival of UK businesses. It is essential that businesses are aware of the support packages made available by the Government and that they obtain support quickly in order to minimise business disruption and to steer them through the impact of the COVID-19 outbreak. We have outlined the support measures for businesses announced by the Government below – full details can be found on the Government’s Covid-19 website.
Business Support Measures Announced So Far
- Sector Specific Support for the Hospitality, Retail, Seafood, Creative Industries, Technology and Third sectors.
- Coronavirus Job Retention Scheme
- Coronavirus Self Employment Income Support Scheme
- Coronavirus Business Interruption Loan Scheme (CBILS) offering loans of up to £5m for businesses with a turnover under £45m.
- Coronavirus Large Business Interruption Loan Scheme (CLBILS) offering loans of up to £50m for businesses with a turnover in excess of £250m, and £25m for businesses with turnover between £45m and £250m.
- Deferral of VAT payments
- Income Tax deferral for self-employed
- Statutory Sick Pay relief package for SMEs
- HMRC Time To Pay Scheme
- Small business grant funding of £10,000 for all business in receipt of small business bonus scheme (Scotland) small business rate relief (England) or rural rate relief
- COVID-19 Corporate Financing Facility, a new lending facility from the Bank of England to help support liquidity among larger firms, helping them bridge coronavirus disruption to their cash flows through loans
Small Business Support
Businesses that pay little or no business rates:
- Cash grants for businesses who qualify for small business rates relief (SBRR) (England), small business bonus scheme (SBBS) (Scotland) or Rural Relief of up to £10k
- You qualify for SBRR if your property’s rateable value if less than £15k, and you only use one property. You qualify for SBBS if the combined rateable value of all your business premises is £35k or less, and the rateable value of individual premises is £18k or less
- Applicable businesses should contact their local authority, although the local authorities should be contacting small businesses that meet the criteria
- Grant money will not be available until early April
Large Business Support
COVID-19 Corporate Financing Facility (“CCFF”):
- New lending facility, available from 23 March 2020 provided by the Bank of England to provide a quick and cost-effective way to raise working capital via the purchase of short term debt
- The CCFF will provide funding to businesses by purchasing commercial paper of up to one year maturity, issued by firms making a “material contribution” to the UK economy
- It is to help businesses across a range of sectors to pay wages and suppliers, even while experiencing severe disruption to cashflows
- The facility will purchase sterling-denominated commercial paper with the following characteristics:
- Maturity of one week to twelve months
- Where available, a credit rating of A-3 / P-3 / F-3 / R3 from at least one of Standard & Poor’s, Moody’s, Fitch and DBRS Morningstar as at 1 March 2020
- Issued directly into Euroclear and/or Clearstream
- CCFF can be used by Companies – and their finance subsidiaries – that make a material contribution to the UK economy are able to participate in the facility. Companies must do this via a bank. There is more detail on this in the following questions:
- In practice, firms that meet this requirement would normally be: UK incorporated companies, including those with foreign-incorporated parents and with a genuine business in the UK; companies with significant employment in the UK; firms with their headquarters in the UK. They will also consider whether the company generates significant revenues in the UK, serves a large number of customers in the UK or has a number of operating sites in the UK.
- If firms do not have an existing credit rating from the major credit ratings agencies, one potential route to evidencing credit status is for your firm or your bank to get in touch with one of the major credit rating agencies to seek an assessment of credit quality in a form that can be shared with BoE and HM Treasury, noting that you are doing so because you wish to use the CCFF.
- If businesses would like to use the facility and have not issued commercial paper before, they should contact their incumbent bank in the first instance. It is important to note that not all banks issue commercial paper. If the incumbent bank does not issue commercial paper, UK Finance has provided a list of those banks that are able to assist.
- Further details can be found on the Bank of England website.
If you have any questions at all, please do not hesitate to contact Chris Thompson.
If you are unsure about what Government support package is available to your business, we are here to help.