In the Budget on 11th March, the Chancellor, Rishi Sunak, introduced a significant package of financial support from the Government aimed at helping business, individuals and the most vulnerable in our society during this crisis. We were told that the initial package amounted to around £30bn, however, so much has transpired since then, including two interest rate cuts from the Bank of England that the Budget seems like a distant memory already. Below details how the Government has since gone even further stating that they are now spending what equates to 15% of the United Kingdom’s total GDP on this support stimulus.
- Self-Assessment payments due 31st July 2020 deferred until 31st January 2021 - interest and penalty free.
- Mortgage lenders will offer a minimum 3 month payment holiday for those suffering financial hardship as a direct result of coronavirus.
- Landlords will also be protected as the 3 month mortgage payment holiday is extended to Buy to Let mortgages.
- Sick pay to commence from day 1 and not day 4 and amount to an increase from £94.25 per week to £95.85 starting tax year 2020/21. Universal Credit (standard allowance) and Working Tax Credit (basic element) to increase by an additional £20 over and above the planned annual increase.
- Emergency legislation to suspend new evictions from social or private rented accommodation.
- Grants of 80% of average monthly profits over the last 3 years, up to a maximum of £2,500 per month – less than 3 years profits will be considered on an individual basis. This only applies on annual profits up to £50,000.
- Potential to make tax payments in interest free instalments.
- Employment and Support Allowance (a basic £73.10 a week for those 25 and over, rising to £74.35 in 2020/21) will be claimable from day 1 instead of day 8. The minimum income floor in Universal Credit is temporarily removed if an individual gets coronavirus or has to stay at home because of it.
- Reimbursement for employee salaries up to 80% (maximum of £2,500 per month) if employee is not working but remains on the payroll.
- Potential to agree payment of tax (e.g. income tax /corporation tax) in interest free instalments.
- Businesses with fewer than 250 employees can be refunded for the cost of Statutory Sick Pay for up to 14 days. The size of an employer will be determined by the number of people they employed as of 28th February 2020.
- Business interruption loans are available to small and medium businesses from 23rd March 2020 for up to £5 million, interest free for 12 months. This scheme will help any qualifying business with a turnover of up to £45m. Also from 23rd March 2020, the BoE Covid Corporate Financing Facility will provide a quick and cost-effective way to raise working capital for those large firms who need it.
- Commercial tenants who cannot pay their rent because of coronavirus will be protected from eviction. No business will be forced out of their premises if they miss a payment in the next 3 months.
- For the period between 20th March 2020 and 30th June 2020, businesses will not need to make a V.A.T. payment. Businesses will have until the end of the 2020/21 to pay any liabilities that have accumulated during the deferral period. V.A.T. refunds and reclaims will be paid by the Government as normal.
- Liquidity support for large companies using a new lending facility provided by the BoE at a low cost.
- Lending support for SME’s providing loans of up to £5 million, with no interest due for the first 6 months.
- Businesses in the retail, hospitality and leisure sectors will pay no business rates for 12 months, and are eligible for a £25k cash grant per business, irrespective of their rateable value.
- £10,000 cash grants to the 700,000 of the smallest businesses.
These measures are unprecedented. Only time itself, will tell if they were enough.