By Paul Byett, managing partner, UHY Hacker Young, Newport

The Chancellor has announced economic aid up to £350bn to support the UK retail, hospitality and leisure sectors.

The measures are quite complicated and involve contact with numerous different financial institutions and local authorities.

Here is how they apply to Newport businesses in the sectors mentioned.

Some confusion seems to exist but for clarity at the moment these only relate to the retail, hospitality and leisure sectors – shops, pubs, theatres, restaurants which have been singled out for the public to avoid during the coronavirus outbreak.

1. Rates relief and grants will come from the local authority

Newport City Council will be funded by government to provide 100 per cent rates relief for 12 months for businesses in this sector.

Newport City Council will be putting together a grants scheme for up to £25,000 for businesses operating in premises with rateable values £15,000 to £51,000.

Newport City Council will increase grants for those currently enjoying rates free premises from £3,000 to £10,000.

2. Government-backed loans will be available for businesses from their existing bank in these sectors:

Businesses should be in contact with their bank in order to apply for a government backed Business Interruption Loan. The loan can be up to £5m. The loans will be interest free for the first six months as the government will pay the interest.

Large companies will be able to go straight to the Bank of England

3. Capital repayment holidays and mortgage relief for three months

UHY Hacker Young has been in touch with many financial institutions over the past 48 hours. Most banks are suggesting up to 12 months capital repayment holidays on commercial mortgages. Individuals can claim a three-month personal mortgage break on their homes if they are financially affected by the coronavirus.

4. HMRC coronavirus 'Time to Pay' help

HMRC has promised to be more lenient in order to see businesses affected by coronavirus through this period.

I see a number of issues and actions required immediately. All businesses in the retail, hospitality and leisure sectors are likely to be hugely affected by the guidance for the public to avoid their businesses.

All businesses in this sector should be in touch with their local council for the rates relief and the grants.

The issue is that the guidance is new and not pre-released to the local authorities so there is likely to be a delay in the ability to administer the grants in particular.

My advice is to act quickly as it is possible that these schemes will run out of money although the government assures that this will not be the case.

A major issue is that the Chancellor suggested that “if a business in this sector wants a loan then they will get one”. Banks have a credit process in all cases. Banks will not lend to businesses which they do not consider credit worthy. The process may also be lengthy as we saw with a predecessor government guaranteed loan scheme.

The banks will have to credit approve many thousands of applications, then these will be sent to the government.

My fear is that all this will take too long to save jobs and businesses in Newport and the surrounding areas.

All businesses affected by coronavirus in all sectors should be contacting their lenders to ask for capital repayment holidays on commercial loans, mortgages and even HP agreements. HMRC should be contacted with regard to payment plans. This may be the difference between surviving and not.

Finally if anyone’s personal income is affected such as the self-employed then they can get three-month mortgage payment holiday on their homes.

Everyone should stay calm, act now and contact many different organisations in order to reduce their cash outflows in the next few months.