Great Britain: London augments financial support for businesses facing coronavirus

On 17 March, not even a week after the UK budget was presented that included a package of business-friendly measures, Rishi Sunak, the UK’s recently appointed UK Chancellor of the Exchequer, has announced a whole new raft of supports to help companies “meet the fixed costs of their staff without having to let them go.” The UK Government will now guarantee all company loans up to a total of £300 billion (€363 billion). An article in the upcoming Covid Bill will allow the government to exceed its fiscal rules in order for it to provide finance where it deems fit. Business rates are suspended for the next 12 months in the retail, hospitality, catering and leisure sectors. Pubs, clubs, and theatres will now be able to make Covid-related claims against their insurance policies. Individuals struggling with lack of finance will be exempt from property loan repayments for three months. The General Secretary of the TUC, Frances O’Grady argued, “this can’t be just a bailout for boardrooms. It has to put money in workers’ pockets too.” Employers are calling for even stronger measures including lower VAT rates and social contribution amounts. Dame Carolyn Fairbairn, CBI Director-General has called for, “an immediate mechanism is needed to top up wages for firms with no choice.” During the evening of 17 March, the Chancellor announced he was delaying the introduction of IR35, new off-payroll working tax rules that were to apply to medium and large sized companies in April 2020 and that had been a cause for concern for employers (c.f. article No. 11566).