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Coronavirus (COVID-19): Summary of Government Assistance for Businesses, the Employed and the Self-Employed

23 March, 2020

On the evening of Friday 20 March, 2020, the Chancellor of the Exchequer announced further unprecedented measures to help individuals and businesses cope with the financial strain caused by the coronavirus.

The new measures include:

The Coronavirus Job Retention Scheme: all UK employers will be able to access support to continue paying part of their employees’ salary for those employees that would otherwise have been laid off during the crisis. If an employee is unable to work due to the coronavirus pandemic, the government will pay up to 80% of their gross salary (up to £2,500 per month).

This measure is initially open for three months and the Chancellor of the Exchequer has confirmed it will be extended if necessary. This salary subsidy will be backdated to 1 March 2020 which means that it will also apply to businesses who have already had to lay-off employees due to the coronavirus pandemic, so long as those employees are brought back into the business.

Employers will need to:

1. Designate affected employees as ‘furloughed workers’ and notify employees of this change (existing employment law applies and changing the status of an employee may be subject to negotiation); and
2. Contact HMRC through a new online portal that will be set up and submit information about the employees who have been furloughed.

The government hopes that the first payments will be made to employers by the end of April 2020. This measure is aimed at protecting jobs and avoiding mass unemployment.

  • The Coronavirus Business Interruption Loan Scheme will be interest free for 12 months (instead of interest free for 6 months, as previously announced). These loans will be available from 23 March, 2020.
  • The Retail and Hospitality Grant Scheme: businesses in the retail, hospitality and leisure sectors may be entitled to a cash grant of up to £25,000 per property (depending on the rateable value of the property). Eligibility rules apply.
  • The next quarter of VAT payments will be deferred until the end of June 2020.
  • Self-assessment income tax payments which were originally scheduled for 31 July 2020 are deferred for 6 months (until January 2021).
  • Increasing the Universal Credit standard allowance and the Working Tax Credit basic element by £1,000 a year for the next 12 months.
  • Suspending the “minimum income floor” which is the amount the Department of Work and Pensions uses to set the payment of universal credit for the self-employed each month. The temporary removal of the “minimum income floor” means that anyone who is self-employed is now treated the same as anyone who is employed within the universal credit system. The government has said that the suspension of the “minimum income floor” will last for the duration of the coronavirus outbreak.

*The information set out in this article is correct at the date of publication (23 March, 2020). The effect of coronavirus on businesses is a fast-changing area and so it is important to obtain legal advice to ensure you are properly protected. Find out more about the latest Government support for employees.

Contact Us

If you have any questions regarding the impact of the Coronavirus upon your business or are seeking up-to-date legal advice, contact Alice Toop on 01202 294 566 or email AliceToop@steeleraymond.co.uk.

 

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