UK’s economic rescue package

In a further move to aid the economy, Chancellor Rishi Sunak has announced the Government’s economic rescue package amidst the ongoing Coronavirus crisis.  This follows the Prime Minister’s announcement that from tonight, all bars, pubs, restaurants, gyms, cinemas, night clubs and leisure centres are to close their doors.

Here is a summary of key points announced today:

Coronavirus job retention scheme
All businesses will be eligible to contact HMRC to apply for a grant for 80% of wages for employees who are not working, up to a maximum of £2,500 a month.  This will be backdated to 1 March and will be open initially for 3 months, with extensions promised if necessary. Employers can of course top this up further if they choose to.  Rishi Sunak said that there will be ‘no limit’ on the scheme.

 Loans for businesses will be available from Monday
The Chancellor announced that the coronavirus business interruption scheme will now be interest free for 12 months, rather than 6 months as previously planned.  It was advised that these would be available from Monday.

VAT breaks for business
In order to provide further cash flow support, the Chancellor said that he will defer the next quarter of VAT payments until the end of June.

Universal Credit allowance to be raised
The Universal Credit standard allowance is to be raised by £1,000 a years for the next 12 months.  The working tax credit basic element is also to be raised by the same amount.

Support for self-employed
Self-employed workers will be able to access Universal Credit at a rate equivalent to statutory sick pay for employees.

Business rates abolished for worst affected sectors
Business rates are to be abolished altogether for businesses in retail, hospitality and leisure sectors.

Support for private renters
£1bn of support for renters will be provided by “increasing the generosity” of housing benefit and Universal Credit to cover “at least 30% of market rents”

Further guidance
The Chancellor advised that further guidance and information will be published in the coming days.  This is expected to include guidance as to how any salary grants will be calculated for zero hour workers.  As always, we will endeavour to update you as soon as this information is released.

 This reflects the law at the date of publication and is written as a general guide. It does not contain definitive legal advice, which should be sought as appropriate in relation to a particular matter.