COVID-19 SUPPORT: Daily Update – Wednesday 1 April 2020
High Street benefits from £22 billion grants and business rates package
From today, many high street firms will begin to receive £25,000 cash grants. They will also be exempt from business rates as part of a £22 billion package to help those affected by the coronavirus outbreak.
Eligible properties (to include the leisure, hospitality and retail sectors) will not pay business rates for 12 months and this measure is aimed to save firms £11 billion.
Please note that if eligible businesses have already made payments, these will be refunded by the local authority and local authorities will be in contact with businesses about the package.
One off grants of £10,000 and £25,000 will also start to be given to the smallest businesses today. £10,000 will be given to small businesses that are eligible for Small Business Rates Relief or Rural Rates Relief. In the retail, hospitality and leisure sectors, £25,000 grants per property for each property with a rateable value of over £15,000 and below £51,000 will be provided, and £10,000 grants per property will also be given for each property with a rateable value of £15,000 or less.
Import Duties and VAT: Covid-19 Medical Supplies, Equipment and Protective Garments
Guidance was issued by the Treasury yesterday on the non-payment of import duty and VAT on medical supplies, equipment and protective garments (COVID 19).
Rishi Sunak made the decision last Friday to waive import taxes on vital medical equipment including ventilators, protective clothing and coronavirus testing kits. Goods arriving outside of the EU will not be subject to import VAT or customs duty and it is intended that the removal of the taxes, which can be up to 12% of the price of the goods, should help make sure that the equipment reaches the frontline workers faster.
The relief can be claimed immediately by state organisations, including state bodies and public bodies and other authorised non-state bodies. The relief will apply until 31 July 2020 and can be claimed on goods for free circulation that are:
- for distribution free of charge to those affected by, at risk from or involved in combating the coronavirus (COVID 19);
- to be made available free of charge to those affected by, at risk from or involved in combating the coronavirus outbreak whilse remaining the property of the organisations importing them; and
- protective equipment, other medical devices or equipment for coronavirus.
The guidance can be accessed here.
Treasury trebles spending to raise cash from markets in April
The Debt Management Office (which raises cash for the Treasury) has announced that it will seek to raise £45 billion in April compared to an anticipated figure of £16 billion at the time of the Budget when it was realised earlier this month.
The measures are part of an exceptional revision to fund interventions to support the UK economy during the coronavirus outbreak. These include the Coronovirus Job Retention Scheme which will start to pay out at the end of April, and the delay of many taxes which would normally have been paid by businesses during this time.
In order to raise money, the government will auction its gilts (otherwise known as bonds) 18 times in April.
The former bank of England’s deputy governor, Sir Charles Bean, has indicated that the level of Government borrowing could reach the same level as that in the financial crisis in 2008 – the budget deficit could top £200 billion this year which is nearly 10% of GDP, the same level as that reached in 2008.
Please see our daily updated Financial Support Guide for Businesses for futher information- COVID-19 FINANCIAL SUPPORT FOR BUSINESSES
For more information on any of the points raised, please contact our corporate team.