Coventry City Council have issued the below Breifing Note for businesses on 20/03/2020:
Purpose of the note:
This note provides information on the support available to businesses in Coventry following the outbreak of COVID-19 that were announced in the 2020 Budget on 11/3/2020 and then a follow up News Conferences on 17/3/2020 and 20/3/2020, which announced expanded support measures.
The impact of COVID-19 is being felt by a number of companies and across all business sectors. Coventry City Council’s Economic Development Service (EDS) is collating this business intelligence, both at an individual business and macro-economy level, which is then being fed into weekly reports to the Department for Business, Energy & Industrial Strategy, which are submitted by CWLEP Growth Hub.
In the meantime, there are a number of current and proposed initiatives to support businesses, to help get them through this challenging period.
Business Finance and Related Employment Measures:
COVID-19 Job Retention Scheme
On 20/3/20, the Chancellor announced the creation of this scheme, which businesses from any sector will be eligible for. Businesses will be able to access grants from HMRC to cover the wages of their employees, initially for up to 3 months. These grants will cover 80% of the salaries of these retained workers, up to £2,500 per month.
VAT Payments Deferred
The Government will defer the next quarter of VAT payments for firms. No business will pay VAT until the end of June 2020.
Protection of Self Employed
Universal Credit standard allowance will increase by £1,000, for the next 12 months, as will the Working Tax Credit basic element. The minimum income floor for Universal Credit will also be suspended. This means that self-employed people can now access, in full, Universal Credit at a rate equivalent to Statutory Sick Pay for employees. For the self employed, the next self-assessment payments will be deferred until Jan 2021.
A Business Interruption Loan Scheme was announced in the Budget on 11/3/2020; however, this was expanded in the announcements on 17/3/2020 to cover a range of activities such as paying staff, paying rents, and paying suppliers. A £330bn finance package was announced. For large businesses, the Government will set up a commercial lending facility with the Bank of England. For SMEs, the Government will set up a Business Interruption Loan Fund, through which the SMEs will be able to access loans of up to £5m, for which the government will provide lenders with a guarantee of 80% on each loan. The loans are will be interest free for 12 months, and will be accessed through retail banks and launched w/c 23/3/2019.
Grants to the Smallest Businesses
The Chancellor announced on 17/3/2020 a one-off £10k coronavirus grant for businesses that pay little or no business rates (an increase from the £3k announced in the Budget). Around 3,477 businesses in Coventry are currently eligible for Small Business Rate Relief (SBBR) and can apply for the emergency funding. These grants will be channelled through Local Authorities.
Business Rates Relief and Grants for Retail, Leisure and Hospitality Firms
This is principally to support businesses in the Leisure, Hospitality and Retail sectors with cashflow and fixed costs, especially as many businesses in these sectors were told to close on 20/3/20. The government indicated that businesses in these sectors will be able to make insurance claims, but as many don’t have insurance, more is needed. Therefore, businesses in this sector with a rateable value of under £51k will receive cash grants of up to £25k (up from the £10k announced in the Budget), which will again be issued through Local Authorities. In addition, all businesses in these sectors will not pay any business rates in 2020/21. The Chancellor indicated that Local Authorities would be compensated, but has yet to provide specific details on this.
Bespoke Support Packages
The Chancellor will also work with Government Departments to design further bespoke support packages for individual sectors. For example, he will work with the Transport Secretary to design a support package for airlines and airports. Although many third sector bodies will benefit from the rate relief and grants, it is possible that further support measures will be announced.
Interest Rates & SME Term Funding Scheme From Banks
The Bank of England has cut interest rates from 0.75% to 0.1%. The Bank has also announced SME Term Funding Scheme, to help reinforce the transmission of the reduction in Bank Rate to the real economy and will further support the ability of banks to supply credit e.g. Lloyds Banking Group is to make £2 billion available to SMEs that need help to overcome cashflow issues caused by COVID-19.
Statutory Sick Pay & HMRC
For business with under 250 employees, the cost of providing statutory sick pay for up to 14 days due to coronavirus will be funded by the Government in full. In terms of timeframe the following statement has been issued, ‘...the government will work with employers over the coming months to set up the repayment mechanism for employers as soon as possible...existing systems are not designed to facilitate employer refunds for SSP’; although self-employed people can now more easily make a claim for Universal Credit or Contributory Employment and Support Allowance. HMRC will scale up the Time To Pay service, allowing businesses and the self-employed to defer tax payments over an agreed period of time. These arrangements are agreed on a case-by-case basis and are tailored to individual circumstances and liabilities. These businesses can contact HMRC’s new dedicated COVID-19 helpline for advice and support on 0800 0159 559.
For renters, housing benefit and universal credit will be increased. The local housing allowance will cover at least 30 percent of market rents in localities.
Support for Individuals Experiencing Difficulties Through Coronavirus.
The Budget announced a £500m hardship fund will distributed to Local Authorities to support vulnerable people in their area. On 17/3/2020, the Chancellor also announced that mortgage lenders would offer 3 month mortgage holiday for those in difficulty, although nothing specific was announced for renters. The Government will also work with trade unions and business groups to develop new forms of employment support.
The EDS continues to work closely with the CWLEP Growth Hub, Chamber of Commerce, CWRT, FSB and Warwickshire County Council to share business intelligence, which will help with the development of the Chamber’s Coronavirus Toolkit and the Growth Hub’s Coronavirus Information page for businesses.
The EDS is monitoring the impact on our business community on an on-going basis; whilst continuing to offer the support around access to finance, grants to facilitate investment, carbon savings, employment, skills and product development.
For the most recent information and advice on support available for businesses please contact the Economic Development team firstname.lastname@example.org