Covid-19: Chancellor announces package of economic measures including paying up to 80% of workers’ wages

Chancellor Rishi Sunak has announced an ‘unprecedented’ package of measures to support workers during the Covid-19 crisis.

The announcement comes as Government instructs entertainment and hospitality premises, like bars and restaurants, to close from tonight to limit spread of coronavirus.

A new Coronavirus Job Retention Scheme will be set up to help pay people’s wages.

Employers will be able to contact HMRC for a grant to cover most of the wages of their workforce who remain on payroll but are temporarily not working during the coronavirus outbreak.

Any employer in the country- small or large, charitable or non-profit will be eligible for the scheme.

Universal Credit and tax credits will also be increased as part of an almost £7 billion welfare package in response to Covid-19.

To ease cash flow pressures for UK VAT registered businesses, VAT bills from now until the end of June, will 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 working night and day to get the unprecedented Coronavirus Job Retention Scheme up and running and we expect the first grants to be paid within weeks.

Chancellor of the Exchequer Rishi Sunak 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.”

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 government has confirmed that all measures announced today across the business and welfare package are UK-wide.

Full details of the COVID-19 support for businesses announced today: www.gov.uk/government