Government announces “unprecedented” measure to protect wages
Please note this is very much headline news and we will be updating this article as soon as we receive further detail on the Government’s announcements.
This evening the Chancellor has announced “unprecedented” and comprehensive support measures to support businesses and protect people’s jobs and income during the Coronavirus crisis. The timing of this announcement was particularly crucial tonight as the Government gave immediate orders for theatres, leisure centres, cinemas, pubs, cafes and restaurants to close without delay.
Most notably an historic measure was announced to protect all jobs and income with the new Coronavirus Job Retention Scheme. The Government will step in to assist any employer to cover the wages of all employees retained on payroll but at risk of being laid-off due to the impact of Coronavirus. For those employees retained but not working due to workplace closures or a downturn in business, up to 80% of wages will be paid (subject to a limit of £2,500 per month – just above the medium income). Employers can choose to top this up. This measure, to be back-dated to 1st March 2020 and available initially for an initial 3 month period (to be reviewed and extended if required) will assist employees to retain their jobs. The first grants, to be administered by HMRC, are expected to be paid within weeks.
Further details of this scheme will provided by the Government next week and in turn we will provide a more detailed update for you.
The Chancellor also clarified that the Coronavirus Business Interruption Loan (CBIL) Scheme, originally outlined in the budget, will now be offering interest free loans for 12 months starting on Monday. Further measures regarding the deferral of VAT payments were also announced.
This evening’s announcement follows the measures announced as part of the Spring 2020 Budget when the Government announced several measures to help employers who are struggling with the economic consequence of Covid-19. These included:
- A Statutory Sick Pay relief package for SMEs
- A 12-month business rates holiday for all retail, hospitality and leisure businesses in England
- Small business grant funding of £10,000 for all businesses in receipt of small business rate relief or rural rate relief
- Grant funding of £25,000 for retail, hospitality and leisure businesses with property with a rateable value between £15,000 and £51,000
- The Coronavirus Business Interruption Loan Scheme offering loans of up to £5 million for SMEs through the British Business Bank
- A new lending facility from the Bank of England to help support liquidity among larger firms, helping them bridge Coronavirus disruption to their cash flows through loans
- The HMRC Time to Pay Scheme – support for businesses paying tax