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Further measures to assist businesses and employees

In light of the current Coronavirus Covid-19 Pandemic and the Government’s announcements of measures they are taking to assist businesses and employees, we wanted to reassure all our clients that we are here to guide you through the legislation. We aim to help you make sense of the guidance and explain how it will affect you. With this in mind, we intend to update our website with regular blogs which you will hopefully find useful.

Additional measures were announced at a press conference held on 20th March. These included: 

1. A Coronavirus Job Retention Scheme (CJRS).This will be set up to help pay people’s wages. Any employer in the country (small or large), including charitable or non-profit, will be eligible for the scheme.

  • Employers will be able to contact HMRC for a grant to cover most of the wages of their workforce who remain on payroll but are temporarily not working during the coronavirus outbreak.
  • UK workers of any employer who is placed on the CJRS can keep their job, with the government paying up to 80% of a worker’s wage costs, up to a total of £2,500 per worker each month. This only applies to employees who have been ‘furloughed’ and will paid via a grant payment from HMRC. HMRC will be setting up a portal for employers to submit claims. Furlough means a leave of absence and it may be necessary to lay-off an employee for them to qualify. It would be best to take specific employment law advice for further guidance.
  • The scheme will be backdated to 1st March and will be initially open for 3 months, to be extended if necessary.
  • It can apply to anyone who was on the payroll at 29 February 2020, even if they have subsequently been made redundant, as long as they are reinstated on the payroll.

2. Assistance with paying rent, salaries, suppliers, or to purchase stock - businesses will be able to access a government-backed loan on "attractive terms" (which have not yet been specified).

  • Support will be delivered to small and medium businesses via the new Coronavirus Business Interruption Loan Scheme (announced at the Budget), which will now provide loans of up to £5 million, with no interest due for the first 12 months (not 6 months, as announced previously).
  • The scheme will be up and running by the start of next week.

3. Deferment of VAT - payments due by all VAT-registered businesses between now and the end of June will be deferred until the end of the tax year.

  • No VAT registered business will have to make a VAT payment normally due with their VAT return to HMRC in that period.

4. Deferment of Income tax payments - payments due on 31 July 2020 under the Self-Assessment system will be deferred to January 2021.

5. Universal Credit - The standard rate in both Universal Credit (UC) and Tax Credits will be increased by £20 a week for one year from April 6th.

  • The 'minimum income floor' for the self-employed claiming UC is temporarily suspended for everyone affected by the economic impacts of coronavirus. This means that every self-employed person can now access, in full, Universal Credit at a rate equivalent to SSP for employees.

Do please contact us if you would like further clarification on your own individual circumstances and we will do our very best to assist you.