Support for businesses during the Coronavirus (covid-19) outbreak

***Information provided by the House of Commons Library***

In a worst-case scenario, up to one-fifth of UK employees may be absent from work during the coronavirus outbreak. This would have significant economic impacts in the UK. This briefing provides information on the various sources of support for businesses affected. It also details some international comparisons.

In a worst-case scenario, up to one-fifth of UK employees may be absent from work during the coronavirus outbreak. This would have significant economic impacts in the UK. This briefing provides information on the various sources of support for businesses affected. It also details some international comparisons.

Pre-existing Government support schemes for businesses are available and may be of help to firms. More information about these can be found in Library briefing “Access to Support for Small Firms”. 

Advice and information for affected businesses is provided in a number of different places. The Government has published advice and guidance for employers on dealing with the coronavirus and related issues. It has also set up a dedicated team, led by the Department for International Trade (DIT) and UK Export Finance (UKEF), to offer:

  • supply chain support
  • help for businesses with cash flow problems

The Government announced plans for a £12 billion package of support for businesses, including:

  • The Confederation of British Industry (CBI) has created an online hub to assist businesses in dealing with the impacts of coronavirus, with ACAS producing similar advice. The Federation of Small Businesses (FSB) has published their own advice, which includes information about the help members of the FSB can call on during the outbreak.
  • A new Coronavirus Business Interruption Loan Scheme that will see banks offer loans of up to £1.2m to support SMEs.
  • Scaling up HMRC Time To Pay service, allowing businesses and the self-employed to defer tax payments over an agreed period of time.
  • Statutory Sick Pay (SSP) costs for businesses with fewer than 250 employees will be met by the Government in full for up to 14 days per employee.
  • Business rates relief for the retail sector and the leisure and hospitality sectors of 100% for one year (in 2020/21). Eligible pubs will also be entitled to a business rate discount of £5,000.

The Bank of England has announced four specific measures to help support the economy against the threat posed by coronavirus: (1) Reduction of the base rate from 0.75% to 0.25%; (2) Introduction of a new Term Funding scheme to support and encourage banks to maintain low-cost lending to SMEs over the next four years; (3) Reduction of the UK countercyclical capital buffer rate, which the Bank estimates will allow banks to lend up to £190 billion more to businesses; and (4) an announcement – via the Prudential Regulation Authority (PRA) – that banks should not increase dividends or bonuses in response to the other actions announced.

UK Finance highlighted its members’ commitment to supporting “viable businesses” and advised any customers concerned to contact their finance provider.

Insurance arrangements for businesses are complex and cover a number of areas. The Association of British Insurers advises businesses to check their cover and to discuss concerns with brokers. Covid-19 has been declared a notifiable disease across UK, which could assist businesses with insurance concerns.

Around the world, Governments are responding to the pandemic in different ways. This briefing provides an overview of some of the different business support mechanisms.

Further Library briefings set out information on these related issues:

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