Support for businesses and employees affected by COVID-19
23rd March 2020
During the current crisis surrounding Covid-19, the Prime Minister and Chancellor of the Exchequer have announced measures that focus on employee/individual support and strengthened the tone on social distancing.
Measures on employee protection:
- The Government will be stepping in to pay people's wages with a new scheme. A grant will cover 80% of wages (up to £2,500 per month) for those employees kept on the payroll. This will be backdated to 1st March, open for three months (though this may be extended depending on how long the crisis continues). This will cover businesses of any size and HMRC is working to get the scheme running within the next few weeks, with first payments to be made by end of April. During the announcement, the Chancellor stated that the scheme will cover everyone on PAYE (including zero-hours contracts). Full details are to be published on Gov.uk.
- Coronavirus Business Interruption Loan Scheme interest free period will be extended to 12 months. The Scheme, which was announced in the 2020 Budget on 11th March prior to the current situation, is expected to be available in week commencing Monday 23rd March.
- Cash flow support via the tax system. No business will pay VAT from now until the end of June, deferring next quarter of VAT payments.. The payments will not be due until the end of the financial year.
- A new national advertising campaign to communicate business support has also been announced with the Chancellor calling for people to consider the support carefully before laying people off.
- Increasing the Universal Credit standard allowance by £1,000 a year. Working tax credit basic element will also increase by £1,000.
- Suspending the minimum income floor for everyone impacted, allowing the self-employed to access Universal Credit up to the level of statutory sick pay.
- Self-assessment payments are also being deferred until January 2021.
Additional announcements:
- New measures include closing bars, restaurants, pubs, theatres, nightclubs and gyms (although take-out services are still allowed). These measures are to be reviewed monthly.
- Further details about the Small Business Grant Scheme and the Retail and Hospitality Grant Scheme have been published you can find these here: COVID-19: guidance for businesses
An online sick note system for COVID-19 absences is now also available.