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As the UK government announces new, stricter measures to curb the spread of coronavirus, businesses across the country are preparing for a vastly different economic climate when we eventually emerge from the crisis. The effects of the pandemic are legion, and it will affect us all: from rising interest rates for borrowers, to a reduced supply chain and slow distribution channels for product manufacturers.

In order to curb (as far as possible) the economic impact on the country, the Prime Minister and his government have introduced unprecedented measures to help businesses stay afloat, help employees keep their jobs and to aid everyone as we transition into a lockdown.

Here’s a round-up of the key emergency measures the government has introduced so far:

• An underwriting of the UK’s wage bill, whereby the government will grant UK businesses 80% of the wages of their employees, who are designated as furloughed employees, of up to £2,500 per month, per employee;
• A deferral of VAT payments by businesses for one quarter;
• Government-backed loans worth £330 billion to support businesses with liquidity issues;
• A waiver of business rates for one year for all businesses in retail, leisure and hospitality, with smaller businesses being eligible for a cash grant of up to £25,000;
• Additional flexibility to agree to additional time to settle outstanding tax bills;
• The ability for SMEs to reclaim up to 2 weeks statutory sick pay paid for Covid-19 related illnesses to their workforce;
• Cutting interest rates to 0.1%; and
• A government-backed business interruption loan scheme to provide loans of up to £5m, up from £1.2 million with no interest due in the first six months.

What this means for you

All of the measures already introduced (of which, the above are only some) and the measures to be introduced this week by the Chancellor, Rishi Sunak, are designed to help ease the financial pressures that Covid-19 is sure to cause businesses. 

With the government set to underwrite wage bills, cut interest rates and introduce a 3 month mortgage holiday for those who own their homes, the new measures may come as some support to both employers and employees concerned about the virus’ impact on job security. Likewise, the government backed loan scheme offering businesses financial support as they face liquidity issues should help stop the tide of businesses declaring insolvency and putting millions of jobs at risk. 

As the government is due to introduce new procedures almost daily, we await further details on changes to commercial leases and other tenancy agreements, and are poised to support our clients and contacts accordingly.  

Our teams here at Lawrence Stephens continue to service the needs of our clients, whether that is offering a fresh commercial perspective in light of a unique situation, or assisting with specific queries regarding employees, company and commercial law, secured lending or commercial and residential property. We have broad expertise across a wide range of sectors, and whilst we are all self-isolating until the pandemic subsides, we remain here to help you implement any and all measures to fulfil your business needs. As the Chancellor assured last week, “we will do whatever it takes”.