As Covid-19 begins to have a profound effect on over a quarter of the world’s population governments are having to do more to prevent disruption to the economy. With many such as the US and the UK feeling the pinch at this time, Government are putting steps in place to make sure the impact is as minimal as possible. In this article, we will be providing you with insight into how these government changes could benefit both businesses and individuals during these uncertain times.
Deferring VAT And Income Taxes
As part of the national effort to make a difference during this time of uncertainty, the conservative government has made unprecedented steps to support businesses of any kind during this time of forced isolation. One of the biggest changes that have been made is the deferring of taxes and VAT.
VAT payments can be deferred for a total of 3 months for businesses that are operational in the UK. This is set to take a load off of businesses as they can use this revenue during this trying time. In addition, income tax payments that were due in June of 2020 under the self-assessment system can now be pushed back until January of 2021.
Statutory Sick Pay Relief Scheme
For those businesses that have lost staff due to self-isolation with suspected coronavirus, there is also a Statutory Sick Pay Relief Scheme. This was out into place to ensure that even those businesses that are suffering can continue to pay their staff when they are self-isolating. This is crucial during this time as many begin to struggle financially. Though this is capped at £94 per week for many, this scheme is in place to ensure that the required amount of pay can be provided by bosses during this difficult time.
The Response From The Bank Of England
Despite the positive response from the conservative government, there are many suggesting that this has not been enough. This is where the response from the Bank Of England has benefited many. The Bank of England has cut their interest rates to 0.1% during this time to make loans more accessible for not only businesses but individual households. This is beneficial for those that are struggling financially during this time as guarantor loans UK providers and those providing business loans will be able to offer better rates. This will also benefit those with poor credit as loans will become easier to pay off within this short period, provided that you have a stable source of income.
12 Month Business Rate Holiday
For those sectors that have been most harshly affected such as hospitality and retail, there is the option for a 12-month business rate holiday. This means that these businesses will benefit from a tax break throughout the 2020-2021 financial year. The businesses that can benefit from this financial aid are as follows:
- Shops
- Restaurants
- Cafes
- Drinking establishments
- Cinemas
- Live Music Venues
- Leisure Centres
- Hotels
- Hostels
- Self-Catering Accommodation
For your business to be eligible for this kind of financial aid, you will need to be operational in the UK and be in these sectors. This tax break allows you to keep additional revenue as a result, allowing businesses to stay as financially stable as possible during these trying times.
As more and more government aid is being issued for business owners as well as employees and those that are self-employed, there are signs that the impact of Covid-19 could lead to an economic crisis if not handled correctly within these very early stages.
