Additional package of support announced for businesses

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Support Package

Rishi Sunak said:

“Getting through this will require a collective national effort, with a role for everyone to play. It’s on all of us. Our Plan for People’s Jobs and Incomes is a combination of measures unprecedented for a government of this nation. The first part is to protect people’s jobs.

For the first time in our history, the British government is going to step in and help pay people’s wages. Government grants will cover 80% of the salary of retained workers, up to a total of £2,500 a month, that’s above UK median earnings level.

The scheme, open to any employer in the country, will cover the cost of wages backdated to March 1st and will be open before the end of April for at least 3 months. There’s no limit on the funding available for the scheme, we will pay to support as many jobs as needed.

Many businesses are hurting now and I can announce that the Coronavirus Business Interruption Loan Scheme will not be interest-free, as previously planned, for 6 months – it will be for twelve months. Those loans will now be available on Monday.

To help businesses keep people in work, I’m deferring the next quarter of VAT payments. No business will pay VAT from now to mid June. You’ll have until the end of the financial year to repay those bills. That’s an over £30bn injection to businesses equivalent to 1.5% of GDP

We are already seeing some job losses. Today I’m increasing the Universal Credit standard allowance, for the next 12 months, by £1,000 a year. I’m increasing the Working Tax Credit basic element by the same amount. These measures will benefit just over 4 million households.

I’m also strengthening the safety net for self-employed people by suspending the minimum income floor. That means self-employed people can now access, in full, Universal Credit at a rate equivalent to Statutory Sick Pay for employees.

Taken together, I’m announcing over £6bn of extra support through the welfare system. And to further support the self-employed through the tax system, I’m announcing today that the next self-assessment payments will be deferred until Jan 2021.

For renters, I’m announcing today nearly £1bn of support by increasing the generosity of housing benefit and Universal Credit, so that the Local Housing Allowance will cover at least 30% of market rents in your area.

We want to look back on this time and remember how, in the face of a generation-defining moment, we undertook a collective national effort – and stood together. It’s on all of us.”

Support Package

I am impressed with the commitment of the government to support businesses int his time of need. We understand their priority for the health of the nation, so this does come as a comfort to many.

We hope it doesn’t become a long-winded affair for people to claim the support they need.

In short, the government will:

~ Help to pay wages for the first time in history via a new Coronavirus Job Protection Scheme. Any employer in the UK will be eligible, and they should contact HMRC for a grant. These grants will cover 80% of salaries, up to £2,500 per month. Employers can top up if they choose to.

~ It will cover the cost of wages backdated to 1st March and will be open for three months. There is no limit on the funding.

~ Further cash flow support was pledged through the tax system – deferring the next quarter of VAT payments. Businesses won’t pay VAT until the end of June.

Watch Fridays full announcement.

Read the whole speech here.

Full guidance for employees.