UK Government Economic Stimulation Measures in Response to COVID-19

The rescue measures include:

• the Coronavirus Business Interruption Loan Scheme: access to government-backed loans of up to £5 million for UK businesses (with an annual turnover of up to £41 million) that are suffering with cash-flow pressures during the crisis period, with no interest due for the first six months, and a guarantee provided by the government of 80 percent on each loan;
• a 12-month break from business rates for businesses of any size within the retail, leisure and hospitality sectors;
• cash grants of up to £25,000 for struggling small businesses within those sectors;
• cash grants of £10,000 for the UK’s smallest companies; and
• support available to all businesses and self-employed people in financial distress, and with outstanding tax liabilities through HMRC’s ‘Time to Pay’ service.

HM Treasury and the Bank of England have also announced the Covid Corporate Financing Facility (CCFF),which will provide financial assistance to companies facing cash flow disruption as a result of the pandemic. Financing will be made available by the Bank of England via the purchase of commercial paper with a maturity of up to one year issued by investment grade non-financial firms making a material contribution to the UK economy. It is intended that the CCFF will operate for an initial period of 12 months. Further details, including application documentation, are expected to be published on 23 March.

The Chancellor also announced an agreement with banks to grant a mortgage holiday of up to three months for homeowners in difficulty as a result of the pandemic.

Government ministers are also set to hold talks to discuss support packages for other affected sectors, such as aviation.

Pillsbury’s experienced crisis management professionals are closely monitoring the global threat of COVID-19, drawing on the firm's capabilities in supply chain management, insurance law, cybersecurity, employment law, corporate law and other areas to provide critical guidance to clients in an urgent and quickly evolving situation. For more thought leadership on this rapidly developing topic, please visit our COVID-19 resources page.

For further information on how to access the UK government package to support your business and employees in the UK, please contact James Campbell or Kristy Duru in the London office or your normal Pillsbury contact.