An Extra Dose of Covid-19 Economic Stimulus Measures

News / 30-03-2020 / London

The spectre of an ongoing, profound economic shock from the coronavirus continues to loom large over the global economy. The good news is that governments seem to have learnt the lessons of the 2008 financial crisis and are responding proactively with unprecedented support measures for the economy to ensure that the extreme measures being taken to defeat coronavirus are not at the expense of peoples’ livelihoods and businesses.

The USA is the latest major economy to step up its policy response. Congress has approved an extraordinary $2.2 trillion relief package, including cash payments of $1,200 to most Americans, increased unemployment payments, and unlimited purchases of government debt and mortgage-backed securities by the Fed. A further US stimulus package is already being contemplated to add additional support and the European Union has also announced that it is working on a stimulus package too.

This Q&A details some of the latest updates on UK government policy response since we published our previous Q&A on 23.3.20. You can check the latest government guidance for businesses, employers and employees here.

You can also access our extensive guidance here, which addresses the evolving range of legal issues that you may need to consider as we all navigate this unprecedented challenge to keep ourselves healthy and businesses trading.

What New Support Measures has the Government Announced for Businesses?


  • Moratorium on debt enforcement and a new restructuring plan permitting ‘cross-class cram-down’. Legislation is set to be introduced soon. - Link
  • Suspension of wrongful trading provisions of the Insolvency Act 1986 to make it easier for directors to keep trading without the threat of personal liability should the company fall into insolvency. - Link


  • Ban on forfeiture of commercial tenancies for a period of more than three months, including in relation to forfeiture proceedings already underway in the High Court. This measure is implemented through Section 82 of the Coronavirus Act 2020. - Link


  • Annual general meetings to be allowed to be held online or postponed. Legislation is set to be introduced soon. - Link
  • Two-week moratorium on preliminary financial statements announced by the FCA in order that listed companies (except those on the AIM) have time to give due consideration to events before making disclosures. - Link
  • Three-month extension period to time to file accounts with Companies House. Companies will need to apply through an online system citing covid-19 as the reason for needing an extension. - Link

Other Industry-Specific Support

  • Funding of up to £25,000 per company for technology companies to develop and test new digital support solutions for those who need to stay at home due to covid-19. The scheme is live and applications close on 1.4.20. - Link
  • Fast-track approval of medical devices through authorisation to supply non-CE-marked ventilators for certain medical uses. This measure is made through a Secretary of State authorisation under the Medical Devices Regulations 2002 and is in force. - Link
  • Manufacturers to get fast-track approval of denatured alcohol and removal of limits on denatured alcohol and duty-free spirits for use in hand sanitisers and gels. The government expects applications to be processed within five working days. - Link

What New Support Measures has the Government Announced for the Self-Employed?

  • Government to cover 80% of monthly profits, derived from an average of monthly profits over the last three financial years, up to a limit of £2,500, for an initial period of three months. This support is available for self-employed people that had trading profits of less than £50,000 in 2018-19 or an average trading profit of less than £50,000 over the last three financial years and who submitted a self-assessment tax return for 2019. Those who pay themselves a salary and dividends through their own company are eligible for the Coronavirus Job Retention Scheme but not for this scheme. This scheme will be accessible before June. - Link

What Other New Measures has the Government Announced?


  • Legislative changes to allow employees to carry over four weeks of annual leave into the next two leave years where it is not reasonably practical to take some or all of the leave entitlement due to covid-19. Legislation implementing this change is now in force. - Link


  • Relaxation of rules on apprenticeships including modifying assessment arrangements and permitting breaks in learning where businesses are disrupted for over four weeks. - Link


  • 6-month extension of MOT expiry date for vehicles with an MOT expiring on or after 30.3.20. This measure applies automatically and you do not need to do anything apart from ensure your vehicle is safe to drive. - Link

The government had previously announced the below measures which we covered in our previous update

What Support is the Government Providing to Businesses?


  • If your business has up to 250 employees, you may be able to reclaim up to 2 weeks of statutory sick pay and expenditure per eligible employee who has been off work due to covid-19 (including in self isolation). The repayment mechanism is to be set up over the coming months. Furthermore, the Coronavirus s.40(1) Coronavirus Act 2020 has also facilitated the disapplication of S.155(1) Social Security Contributions and Benefits Act 1992 in order that statutory sick pay is available from the first day of absence. - Link
  • Coronavirus Job Retention Scheme package which includes the government paying up to 80% of workers’ wages, if they are placed on the scheme, of up to £2,500 per worker per month, backdated to 1st March and open for three months initially. HMRC are presently setting up a reimbursement system. - Link

Business Rates

  • Business-rates holiday for retail, hospitality and leisure businesses in England for 2020-21 tax year and grants of £25,000 to businesses in those sectors operating in premises with a rateable value between £15,000 and £51,000. You do not need to do anything; your local authority will inform you if either of these measures apply to you. - Link
  • Business-rates holiday for nurseries in England for the 2020-21 tax year. You do not need to do anything; your local authority will inform you if this measure applies to you. - Link
  • Additional funding for local authorities to provide a £10,000 grant to businesses that get small business rate relief, tapered relief or rural rate relief (around 700,000 businesses could benefit). You do not need to do anything; your local authority will inform you if this measure applies to you. - Link

Debt Financing

  • Coronavirus business interruption loan scheme through British Business Bank to support businesses with an annual turnover of under £45 million in eligible sectors with an 80%-government-backed loan of up to £5,000,000. The scheme has no lending charge and the government will cover the first six months of interest. The scheme is now available and is administered through participating banks. - Link
  • Government-backed lending facility for large companies to cope with short-term cash-flow issues. The Bank of England’s Covid Corporate Financing Facility is administered through banks and will see the Facility purchase short-term commercial paper to the value of at least £1 million from companies that make a ‘material contribution’ to the UK economy and that were in good financial health prior to the economic shock. The scheme is now available. - Link


  • Businesses in financial distress and with outstanding tax liabilities may be eligible for support through HMRC’s ‘Time to Pay’ service, which gives extra time to pay tax in instalments agreed on a case-by-case basis. The scheme is now available and HMRC have set up a coronavirus helpline - Link
  • Deferring VAT payments for three months from 20.3.20 to 30.6.20. This scheme is automatically in place for all businesses and you do not need to make an application. - Link


  • Support for businesses trading internationally including a Department of International Trade dedicated email address for covid-19-related queries and information on access to existing UK Export Finance support. - Link
  • Relaxation of limits on driving hours and daily rest requirements for all businesses until 21.4.20. The government has introduced this measure pursuant to pursuant to Article 14(2) of Regulation (EC) No 561/2006 - Link
  • Relaxation of planning regulations to allow pubs and restaurants to provide takeaways without a planning application. This measure is set to be implemented by legislation soon. Businesses will need to inform their local authority of the beginning and end of their use of the measure. - Link

What Support is the Government Providing to the Self Employed?

  • Self-employed people in financial distress and with outstanding tax liabilities may be eligible for support through HMRC’s ‘Time to Pay’ service, which gives extra time to pay tax in instalments agreed on a case-by-case basis. - Link
  • Deferring income-tax payments so that payments due on 31.7.20 are now due on 31.1.21. This scheme is automatically in place for all self-employed taxpayers and you do not need to make an application. - Link

What Other Support is the Government Providing?


  • Three-month mortgage holiday for those affected by the virus, including for buy-to-let landlords whose tenants cannot pay rent. This holiday will not affect borrowers’ credit ratings but is not automatic and each bank will have to approve each application through a fast-tracked process. This measure is available now and administered through banks.
  • Increased notice period requirement of three months for new residential tenancy evictions. This measure is implemented through Section 81 and Schedule 29 of the Coronavirus Act 2020. -Link

Please make use of our extensive guidance here, which addresses the growing range of legal issues that you and your business may face. We stand ready to support you and your business through the Covid-19 crisis, please contact us and we will be pleased to help you navigate these challenging times. 

Alex Rogan

Alex Rogan Partner