During today’s coronavirus (COVID-19) briefing, Rishi Sunak, the Chancellor of the Exchequer, announced unprecedented funding designed to protect businesses and save lives during the ongoing pandemic.
The government will step in to cover 80% of salaries, up to £2,500 pcm, for staff who cannot work because of the virus. The grant is intended to cover 3 months of wages, backdating from 1st March. Sunak stated that there will be no limit on the total government spend, should an extension be required. The wage package is the latest in a string of big fiscal attempts to ease the burden on businesses and their employees. Anyone who was on the payroll until 29th February will qualify for the payments.
Self-assessment payments for the self-employed will not be required until 2021. Although specific details on how this will work are yet to be released.
A further announcement made is the deferred payment of Value Added Tax (VAT). Payment of VAT will be suspended for the next quarter, with nothing due until June at the earliest. Businesses will then have until their year end to pay the outstanding amount. This provides an instant £30bn injection into the British economy.
The Coronavirus Business Interruption Scheme, which provides business loans, has given a further boost to businesses by declaring that interest on loans they provide are not payable for 12 months, instead of the initial 6 months stated.
Further to the £350 billion packaged announced by Sunak on Tuesday. This latest measure will be a welcome relief to individuals who were set to be faced with redundancy or Statutory sick pay (SSP) as a result of COVID-19.
It appears certain that this will not be the last of the Chancellor’s attempts to support the economy. We will continue to keep you updated with the latest news as and when it comes.
