The Chancellor said he knew that many businesses were “hurting now” because of the coronavirus crisis as he unveiled another injection of cash to help employers.
Rishi Sunak said he had already taken “extraordinary measures” to make cash available to businesses, through loans, grants and guarantees.
He announced that the Coronavirus Business Interruption Loan Scheme will now be interest-free for a year rather than six months as previously planned, and will be available from Monday.
He said further measures will be spelt out next week to ensure that larger and medium-sized companies can also access the credit they need.
“I’m also announcing further cash flow support through the tax system. To help businesses pay people and keep them in work, I am deferring the next quarter of VAT payments.
“That means no business will pay any from now until the end of June, and you will have until the end of the financial year to repay those bills,” he said.
That was a direct injection of £30 billion of cash to employers, said the Chancellor, on top of business rates being abolished altogether this year for firms in hospitality, retail and leisure, and cash grants of £25,000 for small business properties.
Jonathan Geldart, director general of the Institute of Directors, said it was a “hugely significant step forward” for employers, adding: “Relying mainly on loans wasn’t going to be enough, as many business leaders baulked at the prospect of taking on more risk.
Unsure how the PM and Chancellor's latest #CoronaCrisis announcement affects you and your business, and how you can access government support, loans and financial aid? We're constantly updating our #coronavirus hub with advice for businesses of all sizes: https://t.co/cyoRUL8mY9 pic.twitter.com/kLd6FgocAd
— IoD (@The_IoD) March 20, 2020
“Grants to support employment will be a much more welcome approach for firms stuck between cutting costs and retaining staff, but the acid test of these policies is how fast they reach businesses.
“The scale of the new measures can’t be downplayed, and the deferral of VAT is another substantial move. We’ll be getting the message out to directors about the new support, but we’ll also be listening to their response.
“We know there are still many other areas of concern, including commercial mortgages, rent, late payments and many more. The Government has closed more businesses tonight, but we know this may not be the end of the public health response, so ministers must be ready to act as necessary.”
Dr Adam Marshall, director general of the British Chambers of Commerce, said: “The Chancellor has given businesses desperately needed breathing room at this critical moment.
“The deferral of VAT payments keeps money in the pockets of businesses so that they can pay their people and suppliers.”