Chancellor Rishi Sunak has announced a massive package of support to help employers survive the coronavirus shutdown and continue to pay their staff.
Following the Prime Minister’s announcement that pubs, bars, cafes and other leisure venues must shut from midnight on Friday, Mr Sunak announced billions of pounds worth of measure to prevent businesses going under.
Here are the key points from Friday’s press conference:
Coronavirus Job Retention Scheme
Mr Sunak said any employer in the country would be eligible for the coronavirus job retention scheme issued via HMRC.
“Government grants will cover 80% of the salary of retained workers up to a total of £2,500 a month – that’s just above the median income,” he said.
The scheme will cover the cost of wages backdated to March 1 and will be open before the end of April.
Coronavirus Business Interruption Loan Scheme
An interest-free loan scheme announced last week has been extended from six months to 12 months.
Mr Sunak said: “Thanks to the enormous efforts of our critical financial services sector those loans will now be available starting from Monday.”
Deferred VAT payments
The next quarter of VAT payments due from firms at the end of March have been deferred until the end of June to generate a massive cash injection for businesses.”
Mr Sunak said: “And you’ll have until the end of the financial year to repay those bills. That’s a direct injection of over £30 billion of cash to businesses equivalent to 1.5% of GDP.”
Universal credit and tax credit boost
The standard Universal Credit allowance and the Working Tax Credit basic allowance are both being increased by £1,000-a-year.
“Together these measures will benefit over four million of our most vulnerable households,” Mr Sunak said.
But he warned that the UK is already seeing job losses as a result of the pandemic, adding: “I cannot promise you that no one will face hardship in the weeks ahead.”
Sick pay for the self-employed
Mr Sunak said the minimum income floor for Universal Credit is to be suspended, meaning all those who are self-employed can access Universal Credit at the rate equivalent to statutory sick pay for employees.
“Taken together, I’m announcing nearly £7 billion of extra support through the welfare system to strengthen the safety net and protect people’s incomes,” he said.
Self-assessment payments deferred
The self-employed will not have to make any further payments on their self-assessment tax return until 2021 in what Mr Sunak described as “further support for the self-employed”.
Support for renters
Having announced mortgage breaks for homeowners last week, Mr Sunak announced a £1 billion package for renters by increasing housing benefit and Universal Credit.
He said the welfare payments’ “generosity” would be increased to allow the local housing allowance to cover at least 30% of market rents.