We released an update on 18 March, summarising the measures announced by Rishi Sunak on Tuesday evening, when he said he would do "whatever it takes" to support businesses through the tough times ahead.

On Friday, the Chancellor revisited some of those measures and announced further measures to help the businesses and people of the UK implement the public health requirements of social distancing. It was, in many ways, his third budget in just 10 days. In developing these measures, the Chancellor worked closely with colleagues in the Treasury, and the Governor of the Bank of England, Andrew Bailey, who took up post last Monday morning. The combination of measures that have now been announced are unprecedented in peace time.

The Chancellor recognised that there were two key areas that required further support: support targeted at protecting people's jobs, and offering more to those who work for themselves or find themselves out of work in the near future.

Protect people's jobs

These measures are specifically targeted at enabling companies to retain employees, even where – due to the current circumstances – those employees are not as (or even not at all) productive.

  • The Coronavirus Job Retention Scheme means that all employers are now eligible for a grant to cover 80% of the wages (up to £2,500 per month) of people who are not working but are furloughed (in other words: granted a leave of absence) and kept on the payroll. The aim is to get this entirely new Trades Union Congress and CBI backed scheme up and running before the end of April. While this an ambitious timescale, there is already growing pressure to shorten this lead time
  • The next quarter of VAT payments are deferred, and repayment will not be required until the end of the financial year 2020/21. This measure alone amounts to a £30bn injection of cash to businesses
  • The Coronavirus Business Interruption Loans have undergone their third change in 10 days, first expanded from £1.2m to £5m, now it has been announced they will be interest free for twelve (as opposed to the earlier announced six) months
  • The Chancellor also indicated that "medium sized companies" previously in a blind-spot without substantive additional support, will soon "be able to access the credit they need", pending an announcement this week (w/c 23 March).

The self-employed and those without employment

Recognising that further support is required for these groups, the Government has outlined more generous support for those who are without employment and has sought to "strengthen the safety net" for those who work for themselves.

  • Increases to the Universal Credit standard allowance and Working Tax Credit basic element of £1,000 per year apiece.
  • Suspension of the minimum income floor for the self-employed, meaning that every self-employed person can now access, in full, Universal Credit at a rate equivalent to Statutory Sick Pay for employees.
  • The next self-assessment payments for the self-employed will now be deferred until January 2021.

We have updated our "Quick Glance Table" to take account of the measures announced, and will to do so again as further announcements are made in the coming days. During the course of last week, Womble Bond Dickinson (UK) LLP contacted the Bank of England to urge that more be done for those businesses that were simultaneously too small and too large to benefit from the measures announced last Tuesday. We suggested that the quickest and most wide-reaching way to help all businesses would be to suspend tax payments due imminently. We were pleased to see that tax deferral measures were included in Friday's announcements, but we still think that more assistance will be required, particularly for those in self-employment. As you will see from our comments in the table below, many of the measures raise further questions that will need to be answered.

Business type

Support offered


All employers and businesses

A grant to cover 80% of the wages (up to £2,500 per month) of people who are not working, but are kept on the payroll; and

This is a 3-month arrangement which presupposes that business turnovers will recover within that period to allow furloughed employees to return to work – this may not be the case. Will the scheme be extended or are some redundancies inevitable and it is just that the timing of them has been deferred?

The next quarter of VAT payments are deferred, and repayment will not be required until the end of the financial year 2020/21.

This measure will have a significant positive cashflow effect on a number of businesses, but not all. For businesses that supply zero-rated VAT goods (e.g. food) this will have no practical benefit.

Deferral is not the same as a waiver – so by 5 April 2021 businesses will have had to generate sufficient cash to pay the VAT deferred and make usual quarterly VAT payments

Any business in the retail, hospitality and leisure sectors

A one-year break from business rates

Targeted help for those businesses most obviously impacted by social distancing / isolation measures. But in many cases, this will not make a significant impact to cashflow.

Retail, hospitality and leisure business with rateable values of less than £51k

Government grants of up to £25,000

Obviously, this provides no assistance to larger businesses.

Employers of fewer than 250 employees

The cost of providing 14 days of Statutory Sick Pay per employee will be refunded by the government in full.

Whilst this provides 2 million businesses with up to £2 billion to cover the costs of large-scale sick leave, the benefit is not available to larger businesses, who will have to bear this cost potentially in relation to large numbers.

The "smallest 700,000 businesses" – those businesses currently eligible for small business rate relief or rural rate relief

Cash-grants of up to £10,000

These are being administered by local authorities – if you are a qualifying business paying business rates, you will be contacted by your local authority directly.

The self-employed

Universal Credit at a rate equivalent to Statutory Sick Pay for employees; and

The next self-assessment payments will now be deferred until January 2021

This is the equivalent to £94.25 per week, which does not compare favourably to the offer of 80% of salaries (capped at £2,500 per month) made to employees.

The first payment income tax payment for the tax year ending April 2020 will also be due at the same time, creating a cashflow headache for many in self-employment in January 2021.

Investment Grade and equivalent corporates that make a material contribution to the UK economy

Covid Corporate Financing Facility to provide funding to businesses by purchasing commercial paper


SMEs with a turnover of up to £45m

The Coronavirus Business Interruption Loan Scheme (CBILS) to allow facilities of up to £5m to be put in place with no interest due for twelve (up from six) months

CBILS supports a wide range of business finance facilities, including term loans, overdrafts, asset finance and invoice finance.

There is a key eligibility requirement: any business wishing to borrow a CBILS loan must have a borrowing proposal which, were it not for the current pandemic, would be considered viable by the lender, and for which the lender believes the provision of finance will enable the business to trade out of any short-to-medium term difficulty. This will make it virtually impossible for any business that was already financially stressed to access CBILS funding.

Not all funders are participating in CBILS. The participating funders are:

ABN Amro Commercial Finance, Arkle Finance Limited, Art Business Loans, Ask IF, Bank of Ireland (UK), Bank of Scotland, Barclays, BCRS, Business Enterprise Fund, Calverton Finance, Chamber Acorn Fund (Humber), Clydesdale / Yorkshire Bank, Compass Business Finance, County Finance Group, CWRT, Danske Bank, DSL Business Finance, Enterprise Answers, Finance For Enterprise, First Enterprise, GC Business Finance, Genesis Asset Finance, Haydock Finance, Hitachi Capital (UK) PLC, HSBC, Let's Do Business Group, Lloyds Bank, MSIF, Metro Bank, National Westminster Bank, Newable, Robert Owen Community Banking, Santander, Secure Trust Bank, Skipton Business Finance, SWIG Finance, Royal Bank of Scotland, TSB, UKSE, and Ulster Bank.