Budget 2020: Govt pledges £2bn injection for SMEs

Budget 2020: Govt pledges £2bn injection for SMEs

The chancellor has pledged a £2bn cash injection for small businesses as the government steadies itself for an economy rocked by the Coronavirus outbreak.

Speaking at his debut Budget today (March 11) Rishi Sunak said the government would refund the cost of providing statutory sick pay to any business impacted by the Coronavirus and with fewer than 250 employees.

The chancellor said the measure was a "significant step" in recognition of these "exceptional circumstances" and would apply for any employee off work due to the Coronavirus for up to 14 days. 

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Mr Sunak said: "The measures I’ve announced today on statutory sick pay are crucial to support those who need to take time off work, but that cost would be born by businesses.

"And if we expect 20 per cent of the workforce to be unable to work at any one time the cumulative cost would hit our small and medium sized businesses hard."

The government expects the move to provide a cash injection of more than £2bn to more than two million businesses in the UK. 

The chancellor also said he had asked HM Revenue and Customs to "scale up" its Time to Pay service, allowing businesses and the self-employed to defer tax payments over and agreed period of time. 

This came as he announced the taxman now had a dedicated helpline with 2,000 staff "standing ready to help". 

Today's Budget also saw the introduction of a "temporary Coronavirus business interruption" loan scheme, which will see banks offer loans of up to £1.2m to support small and medium sized businesses through the disruption. 

The chancellor said: "The government will offer a guarantee on loans covering up to 80 per cent of losses with no fees, so banks can lend with confidence." 

He said this would protect the "vast majority of businesses". Business rates will also be abolished for a year for small businesses in heavily-hit sectors. There will also be £3,000 cash grants for small businesses not eligible for business rate exemption, costing £1bn in total