There can be no denying the effect that COVID-19 is having on all of our daily lives. But spare a thought for the millions of SME’s that form Britain’s economic backbone, not least here in Essex.
Not only are workers unable to carry out their usual jobs, but supplies are being interrupted, and it’s hard to ignore the once steady stream of retail shoppers being reduced to a trickle.
Estimates vary as to the long term economic effect with each one seemingly more pessimistic than the last. The truth is that the economy will suffer for as long as the current situation persists, and no official statistic can capture the individual pain of business failure, insolvency, or unemployment.
In such uncertain times it is encouraging to see the UK Government taking positive steps to limit the economic consequences of the virus. The announcement was made just days after the UK budget, and reinforces the fact that this remains a fast moving situation subject to almost daily changes.
The most significant measures for SME’s announced to date include:
Self-employed thrown a lifeline
The five million that number the UK self-employed, contractors, and consultants, are also included in the Government’s support package. Specifically, they stand to benefit from the HMRC time to pay scheme, including a waiver of penalties relating to late payments and interest stemming from COVID-19 related problems.
The self-employed will also be eligible for the business interruption loan scheme.
Notably, the self-employed will not be entitled to Statutory Sick Pay support, but instead corresponding adjustments to Universal Credit and Support Allowance are intended to ease the burden.
Significantly for those affected, the government has confirmed that it will delay its proposed reforms to the IR35 regime until April 2021. These had been planned for introduction in April 2020 to widespread criticism from those in the sector and their professional advisers. The delay will allow those contractors and freelancers, along with those that hire their services, to reflect on the rules and make appropriate adjustments.
With the situation changing on an almost daily basis its difficult to forecast with any certainty what the longer term implications of the pandemic might be. But the above measures, and the government’s commitment to do “whatever it takes”, should offer at least some support to the business sector.
If you would like to find out more about how the team can help you, contact our Company Commercial Team to arrange a free legal review.
Information correct as at 19 March 2020. This article was written by Edward Garston, Partner in the Company Commercial Team at Pinney Talfourd LLP Solicitors. The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. Specific legal advice should be taken on each individual matter. This article is based on the law as of March 2020.