The chancellor has outlined an unprecedented package of support to protect millions of jobs an incomes as part of the national effort in response to COVID-19. This comes as the government instructs all entertainment and hospitality businesses, for example pubs and restaurants, to close to limit spread of coronavirus.
The new Coronavirus Job Retention Scheme will be set up to help pay wages. Employers will be able to contact HMRC for a grant to cover most employees wages who remain on payroll yet are not working during the Coronavirus outbreak. All employers, no matter the company size, will be eligible for this scheme.
Universal credit and tax credits will also be increased as part of a £7 billion welfare boost, as the chancellor outlined is one of the most generous business and welfare package by any government so far in response to the COVID-19.
VAT bills will, from now until the end of June, be deferred until the end of the tax year.
The Chancellor’s workers’ support package means:
- UK workers of any employer who is placed on the Coronavirus Job Retention Scheme can keep their job, with the government paying up to 80% of a worker’s wages, up to a total of £2,500 per worker each month. These will be backdated to 1st March and will be initially open for 3 months, to be extended if necessary.
- VAT payments due between now and the end of June will be deferred. No VAT registered business will have to make a VAT payment normally due with their VAT return to HMRC in that period. Income tax payments due in July 2020 under the Self Assessment system will be deferred to January 2021, benefitting up to 5.7m self-employed businesses.
- Additionally, the Coronavirus Business Interruption Loan Scheme, launched at Budget, will now be interest free for twelve months.
- The standard rate in Universal credit and Tax Credits will be increased by £20 a week for one year from April 6th, meaning claimants will be up to £1040 better off.
- Nearly £1bn of additional support for renters, through increases in the generosity of housing benefit and Universal Credit. From April, Local Housing Allowance rates will pay for at least 30% of market rents in each area.
HMRC are currently working on setting up this scheme, and they expect the first grant to be paid in the next couple of weeks.
Rishi Sunak, the Chancellor of the Exchequer said:
“We continue to do everything possible to protect the public from Coronavirus. We have been working round the clock so that we can today confirm an unprecedented package of support to protect people’s jobs and wages. And we’re strengthening our safety net at the same time.
I said we would help individuals, businesses and the most vulnerable through this outbreak and I meant it. We will do whatever it takes in the weeks and months ahead.”
Work and Pensions Secretary Therese Coffey said:
“We will do whatever it takes to protect the most vulnerable and get them through these unprecedented times, and the changes we are making to Universal Credit will help millions of people in most need.
We are standing by those who rely on the welfare safety net as we work towards turning the tide on this disease and moving on together.”
Business Secretary, Alok Sharma, said:
“We have committed to doing whatever it takes to support businesses and households through these unprecedented times, and today shows just how far we are willing to go.
This intervention is unheard of in peacetime, but it is crucial we stand behind our businesses and those that rely on them for work and income.”
The following businesses have been asked to close:
- Food and drink venues for consumption on-site, such as restaurants and cafes.
- Drinking establishments, including pubs, bars, nightclubs.
- Entertainment venues, including cinemas, theatres, concert halls, and bingo halls.
- Museums and galleries.
- Spas, wellness centres and massage parlours.
- Casinos and betting shops.
- All indoor leisure and sports facilities, including gyms.
The decision on closures will be reviewed on a monthly basis, and are being implemented across the whole of the UK in agreement with the devolved administrations. If needed, the government will enforce these measures by law.
Communities Secretary Rt Hon Robert Jenrick MP said:
“We will do whatever it takes to protect people across this country as we tackle the coronavirus outbreak.
While people have responded well to calls for social distancing and self-isolation, we must go further if we are to be able to stop the spread of the virus and protect the most vulnerable people in our society, and our NHS.
That is why we are now telling entertainment and hospitality premises to close temporarily, and people to only travel if absolutely essential, to help protect each other from the further spread of the virus.
We stand behind businesses and their employees and are offering an unprecedented range of support as we tackle this huge challenge together.”