With business owners throughout the country unsure of what the future holds it is reassuring to know that the Welsh Government has pledged to invest almost £1.4 billion to help businesses during the Coronavirus crisis.
You may wonder why businesses in Wales were not included in the initial statement from Chancellor Rishi Sunak but that is due to the fact that business rates and small business support is devolved. So, as welcoming as this announcement sounds, what exactly does it mean?
Economy Minister Ken Skates has stated that grants and rate relief will be implemented to assist Welsh businesses. There was widespread concern that businesses in Wales would not receive the same financial assistance that their English counterparts had been promised but Mr Skates was eager to dispel that fear:
“After confirming all of the figures with the UK government, we’re going to be investing just under £1.4bn in businesses in Wales. We’re going to match what’s happening in England completely.”
Business rates relief and loans
Retail and leisure businesses along with those in the hospitality sector with a rateable value (RV) of £51,000 or less will be eligible for 100% business rates relief. While pubs with an RV of between £51,000 and £100,000 will qualify for a £5,000 reduction on their bill which will be undertaken by their local authorities.
Following on from this there will be a new package available providing retail, leisure and hospitality companies business rates relief for a year in 2020/21. There will also be a £25,000 grant for businesses in those sectors that have an RV of between £12,001 and £51,000. Additionally, all businesses eligible for Small Business Rate Relief with an RV of £12,000 or less qualify for a £10,000 grant. If your business falls in one of these categories, you don’t need to apply because it will be administered through the Business Rates system.
The UK government also announced a temporary Coronavirus Business Interruption Loan Scheme which will be available to businesses in Wales via the banks and should provide lenders with confidence when financing SMEs.
What about the self-employed?
Although this was good news for many businesses in the Principality there was still concern for others which Mr Skates also addressed: “We’re also going to be establishing a fund that will assist some self-employed people and businesses outside of those sectors and those areas of the economy that are going to benefit from the business rate holiday and the grants.”
Mr Skates continued by explaining that the new fund would help “people who are self-employed who are facing particular strain at the moment because of the effects of coronavirus or it could be businesses outside of the retail sector, the leisure sector, the hospitality sector that are facing a particular struggle right now.”
Anybody who is self-employed will appreciate the difficulty and uncertainty of trading during a stable economy when everything is ‘normal’, so, you can imagine the stress and worry that the current pandemic creates. Additionally, when you consider that the self-employed account for almost 15% of the working population in Wales you begin to understand the scale of this sector and the significant contribution this vital workforce makes to the Welsh economy.
A request to subsidise wages
Mr Skates has also approached the UK Government about subsidising wages for businesses during the coronavirus outbreak so they can provide staff with a basic income or to help them survive through a period of temporary closure; although no decision has been made on this yet.
Nobody knows what the next few weeks or months have in store for businesses in Wales, or anywhere for that matter. But what is certain is that this financial support provides much needed help and hope for businesses in the most uncertain of times.
If you would like to speak with one of our experts for further advice regarding this subject, please visit: https://www.businessbutlerswansea.com/
For up to date advice from the government please visit: https://www.gov.uk/guidance/coronavirus-businesses-in-wales