2020 started off as the worst ever year for the millennials and it seems to be only getting worse with each passing day. The Chinese city of Wuhan unleashed a beast of a virus named COVID-19 onto the world in December 2019 which is both claiming lives and crushing the global economy. The most affected parts of the world currently are China, Europe, The US and the UK. Most countries are allotting billions of pounds to fight this global pandemic.
Recently, UK’s Chancellor Rishi Sunak announced extensive measures to support the economy and those in crisi. Here are some of the major measures, which have been announced, concerning businesses across the UK:
Government Announced Support For Businesses
- The new UK Budget 2020 mainly revolves around the ongoing COVID-19 as Rishi Sunak allotted £30 bn plan as a helping hand to support public services, individuals and businesses.
- VAT payments have been deferred by 3 months.
- Self-assessment payments (for self-employed professionals) deferred for six months until 31st January 2021.
- A £5bn emergency response fund has been allocated for supporting the NHS and other public services in England.
- Doctors who have recently retired and med students are asked to be registered as regular healthcare professionals, to assist the NHS Staff.
- Social Health Workers have also been re-enrolled for now.
- A new job retention scheme has been introduced amid the havoc wherein the government will cover 80% of a worker’s gross wage up to a limit of £2,500 a month.
- Strengthening of the welfare system through more generous universal credit, higher working tax credits and an increase in child benefit.
- Workers have been offered to take “emergency leave” for up to four weeks and an allowance fund has been established that will bear loss of earnings and expenses.
- IR35 reforms have been put on hold until the next year.
- Self-employed who aren’t eligible for sick pay can now claim the Employment and Support Allowance (ESA) from the very first day of the illness. Earlier it was eight days of illness that allowed self-employed to claim ESA.
- Businesses undergoing increased costs or disruptions to their cash flow have full support of the government which includes expanded Business Rates reliefs, a Coronavirus Business Interruption Loan Scheme to support up to a further £1 billion lending to SMEs, a £2.2 billion grant scheme for small businesses, and a dedicated helpline for those who need a deferral period on their tax liabilities.
- Coronavirus business interruption loan scheme rolled out which focuses on smaller businesses with a revenue of up to £45m.
- Loans available for SMEs of up to £5m that will be administered by the British Business Bank.
- The government will cover the first 12 months of interest payments and will provide lenders with a guarantee of 80 per cent on each loan.
- The Bank of England will buy short term debt from larger companies.
- It will also support corporate finance markets overall and ease the supply of credit to all firms.
- Employers will select workers to be granted leave. All such employees will be kept on the company payroll but paid by HMRC.
- Employees who have been granted leave will not be allowed to do any work. All UK employers are eligible for this programme (It would cost £4.2bn if 1million workers are supported for 3 months under the scheme, says the Resolution Foundation).
- Businesses invested in the retail, hospitality and leisure industries have been granted a business rates holiday for 2020 and 2021.
- Businesses in retail, hospitality and leisure sectors can even apply for a grant of up to £25,000 per property.
- HMRC’s Time to Pay scheme will help businesses and /or individuals who are worried about their tax bill filing.
Conclusion:
Seeing the current scenario with the COVID-19 engulfing more and more people everyday, it wouldn’t be a surprise if more new reforms come in offering further support to the businesses in the UK. Read full measures here: https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-support-for-businesses.
Check out the initial budget released on 11th March here. We will keep you updated as and when new reforms come in.
Stay home, stay safe!!
