The Chamber's Arlen Pettitt summarises the actions taken by the Chancellor to mitigate the economic impact of Coronavirus.
Today’s Budget was a game of two halves, with the better part of the first half an hour of new Chancellor Rishi Sunak’s statement dedicated to a £12bn package of ‘temporary, timely and targeted’ measures to mitigate the worst economic impacts of Coronavirus on the UK’s economy.
Over the last few weeks, we’ve heard concerns from Chamber members around sick pay, the impact of a potential fall in demand – especially on those in retail, leisure and hospitality sectors – and whether there will be support available from government to help manage cashflow in what could be a very difficult period.
The Chancellor has addressed most of the obvious potential impacts today, while still acknowledging massive uncertainties in how the impact of the virus will play out across the economy.
The Bank of England also moved decisively this morning, cutting interest rates to 0.25% and making tens of billions extra available to banks to encourage them to loan more freely to households and SMEs.
The Chancellor’s actions included…
- £5bn for the NHS to treat Coronavirus patients and maintain staff levels
- Statutory Sick Pay from day one for those diagnosed or following Government advice and self-isolating. Sick notes will be available via NHS 111 rather than visiting a GP
- For the self-employed, who are not eligible for SSP, quicker and easier access to Universal Credit or Contributory Employment and Support Allowance, without the usual requirement of attending a job centre
- A £500m hardship fund given to Local Authorities to support vulnerable people – with an expectation that most of this will be in the form of Council Tax relief
- New legislation will be brought forward to enable SMEs to reclaim SSP paid for absence due to Coronavirus – both for those diagnosed and those self-isolating. This will cover a period of two weeks absence per employee. No mechanism currently exists to refund employers, so government has promised to put this in place ‘over the coming months’
- Retail, leisure and hospitality businesses will be eligible for 100% business rates relief in 2020/21 – businesses may need to apply to their local authorities to receive this discount. Local Authorities are unlikely to have received updated guidance before 20th March
- If you are already eligible for Small Business Rate Relief, or Rural Rate Relief, you are eligible for an additional grant of £3,000 to help with ongoing business costs. This will impact around 700,000 small businesses across the country
- A Coronavirus Business Interruption Loan Scheme run by the British Business Bank will be launched in the next few weeks, with loans of up to £1.2m available with 80% government guarantee.
- HMRC have launched a dedicated team of call handlers as part of their ‘Time to Pay’ service, helping businesses and self-employed individuals manage their tax liabilities and receive support. If you are concerned about your ability to pay your tax as a result of Coronovirus, you can contact that team on 0800 0159 559
The full details are available from the Treasury here.