The Chancellor Rishi Sunak has announced his employment and wage subsidy package to protect jobs and livelihoods during the COVID-19 pandemic, his third financial intervention in a matter of days. Further details are below.
The Prime Minister, Boris Johnson has also announced that most businesses within the leisure sector should close their doors this evening and the situation will be reviewed on a monthly basis.
Following his announcement of loans and grant support for businesses, Mr Sunak’s latest action goes further in offer support. The move comes after hearing concerns from various business groups and union representatives.
The creation of a new Coronavirus Job Retention Scheme
The scheme as outlined means that any employer in the country, irrespective of size (and including charitable organisations and not for profit organisations) will be eligible to apply.
Employers can contact HMRC for a grant to cover 80% of wages of people who are not working but are furloughed and retained on payroll, rather than being laid off. This will extend up to £2,500 pcm per employee.
We are awaiting further guidance on this, which will be released in due course, along with our packages for how we can assist clients to ensure their access to this support.
At this time the outlined proposal means that the Coronavirus Job Retention Scheme will be backdated until 1st March 2020, and available for at least three months.
It was also confirmed by the Chancellor that this period will be extended if required, and that unlimited funding will be made available for the scheme. He advised that the first grants will be paid within a matter of weeks, and at the very latest before the end of April.
Update to Business Interruption Loan Scheme
In the meantime, the Chancellor reminds business about the availability of the Coronavirus Business Interruption Loan Scheme (‘CBILS’) in the interim period (details here: https://www.nrbarton.co.uk/news/blog/coronavirus-covid-19-business-interruption-loan-scheme-guidance/).
Under this scheme the interest free period for CBILS has been extended from 6 months to 12 months, with funds being made available from Monday 23 March 2020. IT has been advised that more measures would be announced next week to ensure that medium and larger businesses can also access CBILS.
Deferral of the next VAT quarter payment
VAT payments for the next three months will be deferred until the end of the financial year.
This means that businesses will not need to pay any VAT between now and June 2020. The VAT due for this period will not need to be paid until the end of the financial year.
Deferral of Self Assessment Payment
Deferral of self assessment payments until January 2021. This appears to suggest that the July 2020 payment will not be required.
Universal Credit changes
An increase in the level of Universal Credit by raising the standard allowance for the next 12 months by £1000 a year.
Working Tax Credit changes
An increase in the level of the Working Tax Credit basic element for the next 12 months by £1,000 per year.
Support for the self employed via Universal Credit
Extending Universal credit to the self employed by strengthening the minimum income floor for all those affected by the impact of COVID-19.
This means that the self employed can access Universal Credit at a rate equivalent to statutory sick pay for employers.
Support for those living in rented accommodation
To support those who live in rented accommodation by increasing local housing allowance to ensure it covers at least 30% of market rents in all areas.
At this time we are awaiting the detailed guidance on how the above will be enacted. More information and details of how to apply will follow