COVID-19 Business Update 20/03/2020

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Update - 20/03/2020 (part 2) 

My apologies for the late email.

I have now recieved additional information from the Chancellor which can be read here. The Ministry of Housing, Communities, and Local Government also provided an updated letter regarding their guidance on "social distancing" (this is important if you are operating a pub or a restaurant) which can be read here. 

From the Chancellor's letter:

Coronavirus Job Retention Scheme

Today I have announced a UK-wide scheme to pay a grant to any business for each worker they identify as furloughed. A furloughed worker would remain employed by the business but would not undertake any work or be expected to be available for work.

This is to support forms who would otherwise be faced with no choice but to make these workers redundant or ask them to take a period of unpaid leave. Any UK employer with a PAYE scheme, who promises to retain these staff even though they won’t be doing any work for the employer, will be eligible to apply directly to HMRC for a grant under this scheme. These grants will cover 80% of the salary of retained workers up to a total of £2,500 a month – more than the median monthly earnings. We will look to have this scheme available as quickly as possible, aiming to get it done before the end of April. This will be available for at least the next three months, but we will keep it available for as long as is needed.

However, we realise firms need cash now so will be deferring tax payments, as covered below. The principle, which I have discussed with the TUC and Business Representative Organisations, is of sharing the burden between firms, workers and the government. While that means workers will see a reduction in pay, they will keep their jobs, and while firms will still have some costs, they will keep their workforce, ready to bounce back from this crisis.

Further information and details of the scheme will be shared in due course.

There are also more details regarding VAT and Income Tax Self-Assessment, Universal Credit (UC) Standard Allowance and Working Tax Credit (WTC) Basic Element, and other policies announced today that you can read from his letter. I appreciate that there is still a gap of information which I will strive to provide you once I have received them.

I also understand from correspondences with my colleagues that the Government is to announce further measures to support self-employed persons in the upcoming days.

I hope that the information above will aid your deliberations over the weekend. 

Have a great weekend and stay safe,
Holly

Update - 20/03/2020 

I understand that in the past few weeks you may have been trying your best to retain as many staff members as possible. This is the right thing to do and I am pleased to say that the Chancellor had just announced a “Coronavirus Job Retention Scheme” which may, regardless of business size, covers up to 80% of the salary of retained workers of businesses affected by COVID-19, up to a total of £2,500 a month.
 

This will be backdated to the 1st of March, with no limit to funding, and HMRC will be working their best to ensure that this can be delivered in weeks, before the end of April. I urge you to consider this provision before making any decisions on employment.
 

The Chancellor also announced that:

  • The interest-free period for the “Coronavirus Business Interruption Loan Scheme” will be extended from the initial 6 months to 12 months. Loans to be made available on Monday.
     
  • VAT Payment for next Quarter will be deferred, and you will have until the end of the financial year to repay those bills.
     
  • He is suspending the “minimum income floor” for those who are self-employed, which means that they will be able to access Universal Credit at a rate equivalent to Statutory Sick Pay for employees. Self-assessment payments will also be deferred until Jan 2021.

The Prime Minister also announced that restaurants and pubs will be closed off from tomorrow, but will be able to operate as a “takeout” if they choose. I will ask for more guidance on this matter and will share it with you. 
 

I am usually not inclined to share information without further details, and we all know that the devil is in the detail, but I just want you to consider today’s announcement before making further employment decisions.

I will immediately send over further details once I receive them.

Yours sincerely,

Holly