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Chancellor announces ‘coronavirus loan scheme’ to help small businesses

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Chancellor Rishi Sunak announced a number of measures to support businesses and individuals affected by Covid19 in his Budget today, March 11. These include the abolition of commercial rates for certain sectors for the rest of the year, a cash grant for SMEs, an extension of the statutory remuneration and the granting of special loans of up to £1.2 million.

Budget 2020 Highlights

Small Business Rate Relief

Cash grant of £3,000 per business for any business currently eligible for small business rate relief. “This is a cash injection of £2bn directly to 700,000 of our smallest businesses,” the Chancellor said.

The government will abolish professional tariffs for certain sectors for a year

All retail, leisure and hospitality businesses with a rateable value of less than £51,000 will be exempt from paying business rates for the next financial year, the Chancellor announced today.

He said: “Our manifesto promised that for shops, cinemas, restaurants and music venues…with a rateable value of less than £51,000…we would increase their commercial rates to 50%.

“Today, I can go further and make the exceptional decision, for the coming year, to completely eliminate their professional rates.”

statutory sickness benefit

The Chancellor said statutory sick pay will be available to anyone advised to self-isolate, with sick notes available through 111.

For those who are not entitled to sickness benefit, it will be easier to obtain benefits, the Chancellor added.

Statutory sickness benefits are paid by employers, which means that the self-employed are not entitled to them. However, temporary workers are entitled to it. An employee must earn at least £118 a week to qualify. It is currently set at £94.25 per week.

Benefits for freelancers

Following the announcement that the government will pay statutory sick pay from day one, rather than day four, Minister Sunak added “not everyone is eligible for statutory sick pay.

“There are millions of hard-working people who are self-employed or in the gig economy. They will also need our help. So to support them during this time, we will make it faster and easier to get benefits.

Reduction of sickness benefits for companies

The cost to a business of having to be away from work for up to 14 days will be reimbursed, the Chancellor confirmed.

Minister Sunak said £2billion would be allocated to cover businesses that lose because staff are on sick leave. He says this will apply to companies that employ fewer than 250 people.

Access to business loans

Sunak has announced that a coronavirus loan scheme is to be introduced to cover the cost of salaries and bills, which will offer loans of up to £1.2million to support small and medium-sized businesses. The loans will be guaranteed by the government.

He told the Commons: ‘The Government will provide a generous guarantee on these loans, covering up to 80 per cent of losses, free of charge, so banks can lend with confidence.’

“This will unlock up to £1billion in attractive working capital loans to support small businesses, with more if needed.”