Unprecedented measures for unprecedented times

Today the Prime Minister, Boris Johnson and the Chancellor of the Exchequer, Rishi Sunak announced a range of extraordinary measures to keep people apart to stop coronavirus spreading and a comprehensive wage and employment package to protect jobs and people’s incomes.

• Pubs, bars, theatres, restaurants, gyms, cinemas, casinos and all places where people meet socially will close from tomorrow to be reviewed on a monthly basis.

• A new coronavirus job retention scheme will allow employers to apply for a grant to cover 80% of people’s salaries up to £2,500

Coronavirus Job Retentions scheme

For the first time ever the Government will help pay people’s wages by offering grants to employers who promise to retain their staff covering most of their wages. The Government will place no limit on these grants. Any employer in the country – large, small, charitable or for profit – who promises to retain their staff, can apply for a grant to cover most of the wages of people who are not working but are furloughed and kept on payroll, rather than being laid off. Government grants will cover 80 per cent of the salary of retained workers up to a total of £2,500 a month which is above the median income. The cost of wages will be backdated to 1st March and will be open initially for at least three months. The scheme will be extended for longer if necessary.

https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-support-for-businesses#support-for-businesses-through-the-coronavirus-job-retention-scheme

VAT

VAT will be deferred for the next three months until the end of the financial year. This equates to an injection of over £30 billion of cash to businesses to help businesses pay people and keep them in work. 

Universal Credit

Universal Credit and Working Tax Credit will be increased  by £1,000 a year for the next 12 months, that’s nearly £7 billion of extra support. This will benefit over 4 million of the most vulnerable households.

Coronavirus Business Interruption Loan Scheme

The amount that can be borrowed has been increased from £1.2 million to £5million.  There will be no interest to pay for 12 months - that’s six months more than when it was first announced.

Supporting the self employed

Self-employed people can now access, in full, Universal Credit at a rate that is equivalent to Statutory Sick Pay for employees. Income tax self-assessment payments for July will be deferred until the end of January 2021. There will be more announcements for the self-employed in the next few days.

Renters

The government has already announced nearly £1 billion of support for renters, by increasing the level of housing benefit and Universal Credit, so that the Local Housing Allowance will cover at least 30 per cent of market rents in local areas. The Government is introducing emergency legislation to protect renters so that no one gets evicted if they cannot pay their rent.  Emergency legislation will be taken forward as an urgent priority so that landlords will not be able to start proceedings to evict tenants for at least a three-month period. As a result of these measures, no renters in private or social accommodation needs to be concerned about the threat of eviction.

Previous measures announced to support business

  • All businesses in the retail, hospitality and leisure sectors, irrespective of their rateable value, are exempt from business rates for 12 months which will include every single shop, pub, theatre, music venue, restaurant, and any other business in these categories. Any business in these sectors with a rateable value of less than £51,000 can now get access to a government grant scheme of £25,000.
  • All businesses in any sector who currently qualify for the Small Business Rates Relief (SBRR) will get a cash grant of £10,000
  • Liquidity support for large companies, with a major new scheme being launched by the Bank of England.
  • Lending support for small and medium-sized businesses by extending the Business Interruption Loan Scheme which was announced in the Budget. This means that, rather than providing loans of £1.2 million, it will provide loans of up to £5 million, with no interest for the first six months.
  • HMRC have a Time to Pay scheme to provide flexibility for payments of VAT/PAYE etc. Please do take advantage of this and let us know if they are not helping.

Previous measures to support the sick and self-isolated

Statutory sick pay will be available for people diagnosed with COVID-19 or who are self-isolating with a doctor’s note obtained via NHS 111. SSP will be available from day one for people who have COVID-19 and for those who have been advised to self-isolate as well as people within the same household who display symptoms.

For the self-employed it will be quicker and easier to access benefits. Those on contributory ESA will be able to claim from day 1, instead of day 8. To make sure that time spent off work due to sickness is reflected in people’s benefits the Government is  temporarily removing the minimum income floor in Universal Credit. This means self-employed people who fall out of work will still get their full payment. 

Altogether, this is the most comprehensive set of measures in the world to tackle an unprecedented situation. The Prime Minister said that the Government will stand behind employers if employers do their bit and stand behind their workers. Mr Johnson acknowledged the impact of today’s decisions but he said he will ensure that people get the support they need to stay at home and do the right thing because this, in turn, will protect the NHS and save lives.