The Government has ordered a host of high street small businesses – including cafes, bars, restaurants, cinemas and gyms – to close. The Chancellor has also unveiled fresh measures to support small firms and employees impacted by coronavirus-linked disruption, which includes:

  • Launch of a coronavirus job retention scheme, allowing any employer the opportunity to apply to HMRC to have up to 80% of a member of staff’s salary paid – capped at £2,500 a month – backdated to 1 March, running for three months (a time-scale which will be kept under review) with no limit on funding for the initiative.
  • Deferral of any VAT due for the next quarter, and a deferral of self-assessment sums due until January 2021, alongside suspension of the Minimum Income Floor for sole traders claiming Universal Credit.
  • Extension of the interest free period for loans taken out through the business interruption loan scheme from six months to 12.
  • Action on jobs and wages a ‘big, bold move’ to support household finances

In response to the announcement Joanna Elson OBE, Chief Executive of the Money Advice Trust, the charity that runs National Debtline and Business Debtline, said “The Chancellor’s new measures to support jobs and wages is the big, bold step that household finances need as we grapple with the Coronavirus crisis. This will get financial support quickly to households by protecting people’s incomes – and prevent more people falling into financial difficulty in the weeks and months ahead.”

“At the same time there are millions of people already in problem debt, and they urgently need support too, as Coronavirus continues to cripple the UK economy. A temporary suspension of debt collection and enforcement and widespread payment holidays on bills including rent and Council Tax would make an immediate difference.”

“It is a relief to see some action to support self-employed people in the Chancellors’ new package measures, including giving them the same kind of access to Universal Credit as those who are employed. Across the country the incomes of sole traders are falling significantly, however, and even greater action to help the self-employed may become required as this crisis plays out.”

Duncan Swift, President of insolvency and restructuring trade body R3, said “The measures announced today are a positive step and will go some way in providing businesses with the financial help they need to support and retain their staff and weather the economic storm.”

“Once the crisis phase of this is over, businesses will need to rebuild and their staff will play a crucial part in this. The support package the Chancellor has set out today will hopefully enable them to hold on to the talent that will drive their recovery, as well as providing a financial lifeline for many employees facing a period of great uncertainty and turmoil.”

“However, time will tell whether this package is enough. Detail on how this package of support will affect those who are self-employed or on zero hours contracts is needed as these groups are particularly financially vulnerable in the current climate.”

“As well as support for maintaining employment, other help is needed. The VAT payment holiday is welcome, but the same could be done for other taxes.”

“Despite the support the Government is providing, we are aware that this is a worrying time. Any directors or business owners whose businesses are in difficulty or are starting see signs it will struggle should seek professional advice as early as possible. Early advice and early discussions with creditors give a business more options to find and implement solutions to the challenges they face and begin to address issues like rearranging payment terms.”

Peter Tutton, head of policy at StepChange, said “With millions of households worrying whether they’ll be able to make ends meet in the coming months, strong and meaningful support from Government is vital. This announcement brings much needed reassurance now, and should also help mitigate the anticipated surge in financial difficulties later. No-one can pretend this is going to be an easy period for household finances, but timely and decisive action will help.”

“People are already being plunged into financial crisis, so the payment holidays, forbearance, protection against evictions and better help for those who are unwell are essential, as well as the wage support. We’ll need to keep a close eye on whether the benefits system keeps people out of financial harm. We are heartened by the help being offered by those firms trying to do the best by their customers and colleagues. StepChange is here to help, and we urge people who are worrying about financial difficulties not to delay getting the help they need.”

Stephen Jones, UK Finance CEO, said “Banks, building societies and credit unions are committed to supporting all customers and are working closely with Government and regulators to ensure that everyday banking services remain available, while also dealing with the impact of COVID-19 on the wellbeing of their own employees who are working tirelessly during these unprecedented times.”

“With enquiries to customer call centres at unparalleled levels, firms are also ensuring they are constantly keeping their websites updated with the latest information, including FAQs, which can help answer many customer queries.”

“We would encourage only those customers who are facing an immediate issue with their finances to call their provider in the first instance. If a customer needs more general help there are a range of different ways to get in touch, including through online chat, social media and mobile and banking apps.”

Robin Fieth, Chief Executive of the Building Societies Association (BSA) said “We know that many people in local communities, including those who are more vulnerable rely on branches for access to cash. Building societies are taking steps to cover as much ground in their communities as they can while maintaining a safe environment for both staff and customers. Societies are juggling with reduced staff levels themselves but all staff are working hard and being creative in order to do their best for their customers. Examples include opening some branches an hour early to serve older customers and reducing hours so that the staff from one branch can cover two.”

“We know that customers have many questions about their finances just now and we are here to help. Practically, it is worth looking at your society’s website before picking up the phone or visiting the branch as you may well find the answer that you need there.”

Federation of Small Businesses (FSB) National Chairman Mike Cherry said “The closure of thousands of small businesses on our high streets will threaten futures. It’s critical that the cash grants being made available to those in the retail, hospitality and leisure sectors reach them as swiftly as possible – and extension of their scope to other sectors given serious consideration. Insurers must stand ready to help those with business interruption policies.”

“The coronavirus job retention scheme marks an unprecedented intervention. Executed swiftly, it will protect livelihoods and the viability of small employers. Putting a straightforward application process in place for the scheme will be central to its success. Many small employers will today be breathing a huge sigh of relief.”

“However, the fact that it will not be operational for a month means many small employers are still presented with an immediate, potentially terminal cash flow crunch. Therefore it’s vital that banks play their part, and ensure that any small business owner seeking a 12 month interest free loan from Monday is helped immediately – there are no excuses.”

“While it was encouraging to hear the Chancellor pledge his support for the self-employed today – with a commitment to defer self-assessment and VAT bills and suspend the Minimum Income Floor – this Government has a long way to go to show it’s on the side of our five million-strong self-employed community. Over the coming days, we need to see the Chancellor map out how he will directly support the self-employed in the same way as he has committed to directly support employees.”

“The question at this point is – with firms being force to close – why have the self-employed been excluded from the commitment to pay 80% of earnings?”

“It cannot be right that an employee currently earning £25,000 a year could access £20,000 per annum through the new job retention scheme, while someone who’s self-employed earning the same sum might only access around £5,000 worth of support.”

“We need to see the Prime Minister’s ‘whatever it takes’ approach extended to the self-employed – that means following the lead of other nations by guaranteeing 80% of incomes for those who lose work.”

Dame Gillian Guy, Chief Executive of Citizens Advice, said “The government’s unprecedented action to protect workers is extremely welcome. The measures announced today will protect millions of low-income families worried about making ends meet during this crisis.”

“In the coming weeks, it’s vital that the government continues to make sure everyone is able to access the income that they need – including self-employed people and those receiving benefits.”

“We look forward to working with the government to get these details right and ensure everyone can quickly get the support they need.”

Jonathan Geldart, Director General of the Institute of Directors, said “This was a hugely significant step forward for employers. Relying mainly on loans wasn’t going to be enough, as many business leaders balked at the prospect of taking on more risk. Grants to support employment will be a much more welcome approach for firms stuck between cutting costs and retaining staff, but the acid test of these policies is how fast they reach businesses.”

“The perilous position of the self-employed can’t be ignored. While steps to ease the tax burden will provide relief, there are many entrepreneurial people out there who had good businesses last month, but for whom demand has now completely disappeared.”

“However, the scale of the new measures can’t be downplayed, and the deferral of VAT is another substantial move. We’ll be getting the message out to directors about the new support, but we’ll also be listening to their response. We know there are still many other areas of concern, including commercial mortgages, rent, late payments and many more. The Government has closed more businesses tonight, but we know this may not be the end of public health response, so Ministers must be ready to act as necessary.”