Chancellor outlines Emploment and Wage Subsidy Measures in light of COVID-19
This afternoon, 20th March 2020, the Chancellor Rishi Sunak has announced in this his third financial intervention in a matter of days, his employment and wage subsidy package to protect jobs and livelihoods during the COVID-19 pandemic.
At the same time, the Prime Minister announced that most if not all businesses within the leisure sector should close their doors this evening as soon as reasonably possible, including cafes, pubs, bars, restaurants, nightclubs, theatres, cinemas, gymnasiums and leisure centres. The situation will be reviewed on a monthly basis.
After hearing concerns from various business groups and union representatives last night, the Chancellor has now confirmed the following:
The creation of a new Coronavirus Job Retention Scheme
The scheme will mean any employer in the country, irrespective of size, 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.
The Coronavirus Job Retention Scheme will be backdated until 1st March 2020, and available for at least three months, with the Chancellor confirming 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.
In the meantime, the Chancellor reminds business about the availability of the Coronavirus Business Interruption Loan Scheme (‘CBILS’) in the interim period, whilst also confirming that the interest free period for CBILS will be extended from 6 months to 12 months, with funds being made available from Monday 23 March 2020. The Chancellor advised that more measures would be announced during w/c 23 March 2020 to ensure that medium and larger businesses can also access CBILS.
Deferral of the next VAT quarter payment
The chancellor confirmed that VAT payments for the next 3 months will be deferred until the end of the financial year. Therefore businesses will not need to pay any VAT between now and June 2020 and the VAT due for this period will not need to be paid until the end of the financial year.
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, meaning that self employed can access Universal Credit at a rate equivalent to statutory sick pay for employers.
Deferral of Self Assessment Payment
By deferring self assessment payments until January 2021.
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.
We wanted to make you aware of the headline facts as soon as possible so that you can plan ahead. More information and details of how to apply will follow.