further help for businesses
The Government has announced major plans to support business and workers in the UK.
The headline is clearly the new Coronavirus Jobs Retention Scheme where the government will pay 80% of salaries up to a maximum of £2,500 per month. The scheme will be effective from 1 March and will run for three months with the ability to extend the scheme.
We will need to see the detail of the scheme and what, if any, qualifications apply. We will be advising clients on this as soon as details are available.
The Coronavirus Business Interruption Loan Scheme (CBILS) announced just a couple of days ago is going to be amended so that it is interest free for 12 months and not the six months as originally announced.
Importantly, the Chancellor made a comment that further support measures for mid-sized business will be announced on Monday. This is very important because at the moment there seems to be a gap between those businesses that are too big for the SME scheme but not big enough to set up a commercial paper scheme. This will be an important development to follow on Monday.
Other measures announced included the deferral of tax and VAT payments.
We continue to have concerns about the deliverability of the CBILS scheme. In particular, the government is only guaranteeing 80% of the loans which means that the banks will have to engage credit control processes which will take time and add to the administrative burden. But, provided delivery of the Coronavirus Jobs Retention Scheme is consistent with the announcement then this is a major relief for business and workers.
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