Coronavirus - Economic support

UPDATED: 08/04/2020

The Prime Minister and the Chancellor have set out Government economic measures to help support our businesses, our economy, and individuals through the Coronavirus pandemic. This is an unprecedented package of measures, and I have outlined the key points below:

All restaurants, pubs, clubs, cafes & entertainment venues will be temporarily closed as we fight this virus. 

This applies to the following businesses:

  • Food & drink venues
  • Pubs, bars and clubs
  • Cinemas, theatres, concert and bingo halls
  • Spas, indoor leisure and gyms 
  • Casinos & betting shops 
  • Museums & galleries

Some of you have contacted me to ask whether this also applies to hairdressers, barbers, and beauty salons. I have asked and will update you when I know more.

BUSINESS CONTINUITY

  • The Chancellor will make available £330bn of Government guaranteed business continuity loans – equivalent to 15% of our GDP.
  • FOR BIG BUSINESSES: a new lending facility will be established to produce LOW COST commercial loans.
  • FOR SMEs: the Business Interruption Loan Scheme announced at the Budget will be extended, allowing loans of up to £5m with NO interest for the first 12 months. Those loans will now be available on Monday.
  •  VAT payments for the next quarter have been deferred. No business will pay VAT from now to mid June. You'll have until the end of the financial year to repay those bills.
  • If demand is greater than the £330bn, more will be made available.

SHOPS, PUBS, RESTAURANTS, ETC

  • ALL businesses in the retail, leisure, and hospitality sectors will pay ZERO business rates for 12 months.
  • Businesses with rateable values under £51k will be provided with a cash grant of up to £25k per business.
  • For businesses that DO have pandemic cover within their insurance, the Government has said categorically that they will be eligible to make claims against their insurance for Coronavirus.

SMALL BUSINESSES

  • For the smallest businesses in any sector who are already business rates exempt, the Chancellor announced grants of £3k at the Budget. This will be extended, providing grants of £10k.
     

GRANTS

HOMEOWNERS AND RENTERS

  • Mortgage lenders will offer a 3 month mortgage payment holiday.
  • For renters, in addition to emergency legislation to suspend new evictions, there will be nearly £1bn of support by increasing the generosity of housing benefit and Universal Credit, so that the Local Housing Allowance will cover at least 30% of market rents in your area.

WAGES AND INCOME SUPPORT

  • British government is going to step in and help pay people’s wages.
  • Government grants will cover 80% of the salary of retained workers, up to a total of £2,500 a month, that’s above UK median earnings level.
  • The scheme, open to any employer in the country, will cover the cost of wages backdated to March 1st and will be open before the end of April for at least 3 months.
  • There's no limit on the funding available for the scheme, we will pay to support as many jobs as needed.
  • Increasing the Universal Credit standard allowance, for the next 12 months, by £1,000 a year. The Working Tax Credit basic element will also increase by the same amount. 
  • To support self-employed people, the minimum income floor for Universal Credit will be removed. 
  • That means self-employed people can now access, in full, Universal Credit at a rate equivalent to Statutory Sick Pay for employees.

SUPPORT FOR THE SELF EMPLOYED

  • Like employees, self-employed people will be eligible for grants of up to 80% of average profits, up to a total of £2,500 a month for an initial period of three months
  • It is open to those who make most of their income from self-employment and have filed a 2018/19 tax return
  • There will be a 4 week window, until 23 April 2020, for people to submit 2018/19 tax returns and still be eligible
  • It will be based on the average profits over the last three years (or, less if you haven’t traded for three years)
  • Those eligible will be contacted by HMRC as soon as the scheme is live
  • First payments will likely be made in early June (earlier if possible) but WILL be backdated to 1st March

More information can be found here https://www.businesssupport.gov.uk/self-employment-income-support-scheme/

If you are struggling now, we have introduced a number of schemes which can help:

  • You can access Business Interruption Loans, interest free, which could tide you over until June. More info can be found at: https://www.businesssupport.gov.uk/
  • You can now access, in full, Universal Credit at a rate that is equivalent to Statutory Sick Pay for employees
  • Income tax self-assessment payments for July have been deferred until the end of January 2021, so the money you would usually pay in tax in July may be available to you

There are also answers to some FAQs here: https://www.businesssupport.gov.uk/self-employment-income-support-scheme-faqs/

To the self-employed who have contacted me, thank you for your patience whilst these measured were drawn up. The complexity involved meant it took time, but it was important that the Government got it right and made it fair.

I know from growing up seeing my Dad work for himself that the self-employed often take major risks to go into business and keep the cogs of our economy turning. Nobody could plan for the impact of Coronavirus, and so it is right that the Government steps in now to help support you. This is a great and unprecedented set of measures to help provide that support to get self-employed people through this crisis.

As the Chancellor said, HMRC are working night and day to get this scheme up and running and expects the first grants to be paid within weeks. I do not have more detail on the timeline at the moment, but as soon as I do, I will share this on here.

I hope this will provide some reassurance to many of you who have been contacting me with your concerns. I will continue to update you with verified information as and when I receive it.

As always, if you are in need of any support, get in touch with my office: dehenna.davison.mp@parliament.uk

Dehenna