Covid-19 update: “Plan for People’s Jobs and Incomes” & support for businesses

Fri 20 Mar 2020

The Chancellor announces the “Plan for People’s Jobs and Incomes” and provides further support for business as the pubs close for last orders.

It’s been a momentous week, capped off today by the enhanced measures announced by the Chancellor, Rishi Sunak.

The headline will be the closure of pubs, cafes, restaurants, nightclubs, gyms, leisure centres and bars in an unprecedented move to stem to contagion of the virus. This changes society as we have known it for the foreseeable future. However, the detail behind how society and the economy will continue during this period is vital to understand and the Chancellor built on those earlier announcements in a bold speech.

Following on from Tuesday’s announcements, including the extension of off-payroll working rules to the private sector, we outline the further support that has been granted to the UK to keep it moving during the most challenging time the country has experienced in a generation.

So, what was announced?

A Covid-19 job retention scheme

The scheme is open to all employers, regardless of the size of their business.
It is a grant available for employees not able to work of up to 80% of their salary (to a maximum of £2,500 per month), backdated to 1 March –This will be available through HMRC for those involved in a PAYE scheme. Initially this is for three months but may be extended as required.
Employers will be able to contact HMRC for a grant to cover most of the wages of people who are not working but are kept on payroll rather than being laid off.
There are no limits to availability.
The first payments are expected within weeks, and it will be fully up and running before the end of April. For the first time in history, the government is helping to pay wages.
Detailed guidance of the scheme will be published shortly.

VAT payment deferral plan

VAT payments for the next quarter are being deferred, meaning no VAT will be paid until the end of June.
This provides further cash flow support for businesses of £30bn.
This means that time to pay arrangements will still need to be agreed for PAYE, NI, Corporation Tax and other taxes.

Individuals

Self-assessment payments on account due on 31 July 2020 will be deferred until 31 January 2021.
An increase to the Universal Credit standard allowance by £1,000 a year for the next 12 months, by £1,000 a year.
The Working Tax Credit basic element is also increasing by the same amount.
Self-employed people will be able to access, in full, Universal Credit at a rate equivalent to Statutory Sick Pay for employees.

Coronavirus Business Interruption Loan scheme

It will be interest free for 12 months rather than just six (as was initially announced).
It is expected to become available in the week commencing 23 March 2020, with further information published here when the finer details have been agreed – https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-scheme-cbils/ .
As well as loans, there are many other types of finance supported by the programme, depending on the provider.
This support will be provided by the British Business Bank through participating providers, and will offer more attractive terms for both businesses applying for new facilities and lenders, with the aim of supporting the continued provision of finance to UK businesses during the Covid-19 outbreak.

People who rent

Local Housing Allowance will cover at least 30% of market rents in your area.

Where can I get more help?

We are helping clients make sense of it all. There’s so much to digest and we understand that taking some time to discuss this over a phone or video conference can help.

Please do get in touch with your normal Mazars contact or send an email to ian.goodwin@mazars.co.uk, liz.ritchie@mazars.co.uk or jon.capper@mazars.co.uk and we will help you take the necessary steps to manage your organisation effectively.

Ian Goodwin Director - Employment Tax

Detailed profile

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