Covid-19

Research published by the Centre for Economics and Business Research (CEBR) has revealed that UK economic output has reduced to 31% as a result of the coronavirus (COVID-19) lockdown. The CEBR warned that the lockdown has ‘extremely severe economic consequences’ for the UK. According to the research, the manufacturing sector is set to see the highest fall in output in absolute terms as a result of workers who produce goods being unable to do so remotely from home. The CEBR…

On 3 April, Chancellor Rishi Sunak announced changes to the COVID-19 Business Interruption Loan Scheme following criticism that businesses have struggled to access loans. The Business Interruption Loan Scheme was first announced in the 2020 Budget, and provides small and medium-sized enterprises (SMEs) with annual turnover below £45 million affected by the COVID-19 pandemic access to loans, overdrafts, invoice finance and asset finance of up to £5 million for up to six years. According to the government, £90 million in…

A significant number of UK firms face the prospect of running out of cash within three months, according to a survey carried out by the British Chambers of Commerce (BCC). The BCC’s first Coronavirus Business Impact Tracker polled over 600 firms between 25 and 27 March. It revealed that the majority of firms reported a significant decrease in their revenue from both the UK and overseas. The survey also found that cashflow was a major concern, with 62% of firms…

The government has published details on the COVID-19 support schemes for small businesses and retailers. The Small Business Grant Fund (SBGF) was announced in the 2020 Budget, alongside the Retail, Hospitality and Leisure Grant Fund. The funds were created in response to the COVID-19 pandemic, and provide financial support for small firms and businesses in the retail, leisure and hospitality sectors. Under the SBGF, businesses in receipt of either Small Business Rates Relief (SBRR) or Rural Rates Relief (RRR) in…

Company directors who receive salaries through Pay as You Earn (PAYE) are eligible for furlough under the government’s Coronavirus Job Retention Scheme. Under the Coronavirus Job Retention Scheme, businesses are able to apply for government grants for employees’ salaries up to the lower of 80% of an employee’s regular wage, or £2,500 per month for three months from 1 March. The scheme could run for longer if the social restrictions to help halt the COVID-19 pandemic remain in place. As…

The government has relaxed the insolvency regulations during the COVID-19 pandemic in order to give restructuring businesses time to continue trading. The changes will temporarily suspend wrongful trading provisions retrospectively from 1 March 2020 for three months for company directors, enabling them to continue running their businesses without the threat of personal liability. The Institute of Directors (IoD) welcomed the changes to the insolvency rules. Jonathan Geldart, Director General of the IoD, said: ‘During the current crisis, directors are facing…

The Bank of England has unveiled a £100 billion stimulus package to help boost the UK economy following the coronavirus (COVID-19) pandemic. The Bank’s Monetary Policy Committee (MPC) voted to step up its quantitative easing programme, through which the Bank purchases bonds. The £100 billion in additional quantitative easing funds takes the total to £745 billion. The MPC also voted to cut the cost of borrowing to a record low of 0.1%. The Committee admitted it is ‘hard to draw…

HMRC has published guidance on recognising genuine contact from the tax authority during the COVID-19 pandemic. HMRC recently sent text alerts to millions of mobile users regarding COVID-19. The SMS told people to stay at home in order to help prevent the spread of the virus. However, criminals have been taking advantage of the situation and are spoofing official government phone numbers in order to send scam text messages. The messages attempt to convince individuals to pay fines after being…

Businesses that have been affected by the COVID-19 pandemic and are seeking to make use of the VAT deferral have been urged to cancel their direct debits ‘as soon as they can’. Businesses are advised to contact their bank to cancel their direct debits as soon as possible. UK VAT-registered businesses with a VAT payment due between 20 March 2020 and 30 June 2020 have the option to either defer the payment until a later date or pay the VAT…

On the 26 March, Chancellor Rishi Sunak announced a scheme to help self-employed workers who have been hit by the COVID-19 crisis. Under the scheme the government will pay self-employed people a taxable grant based on an average of their earnings over the past three years. The grant will cover up to 80% of earnings up to a limit of £2,500 a month. To be eligible self-employed workers must have filed a tax return for the 2018/19 tax year and have average…