In a bid to ease the strain on economy, the Chancellor has followed through on his promise ‘to do whatever it takes’ to support the economy in a series of fiscal measures which would have been unthinkable just a few weeks ago. The latest measures announced include:
Introduction of the Coronavirus Job Retention Scheme
- All UK businesses will be able to access support to continue paying up to 80% of their employees’ salary (subject to monthly cap per employee of £2,500) for those employees that would otherwise have been laid off during the crisis
- Affected employees are required to be designated as ‘furloughed workers’
- Employees should continue to be paid through the PAYE system
- HMRC will reimburse employers through a new online portal
Deferment of VAT and Income Tax payments
- VAT – the next VAT quarter payments from 20 March 2020 until 30 June 2020 will be deferred and businesses are offered until the end of the financial year to repay
- Income Tax – self assessment payments due on 31 July 2020 deferred until 31 January 2021 for the self-employed.
Business rates for nursery businesses
- A business rates holiday is being offered for the 2020 to 2021 tax year to all England based nurseries operating from premises registered on the Ofsted Early Years Register, wholly or mainly used for the provision of the Early Years Foundation Stage
Support for the self-employed, landlords and individuals
- Extension of the mortgage holiday to Buy to Let mortgages
- Suspension of the minimum income floor for the self-employed so they can access Universal Credit at a rate equivalent to Statutory Sick Pay for employees
- £1,000 increase in the Universal Credit standard allowance and Working Tax Credit basic element for the next 12 months
- Increase in housing benefit and Universal Credit so that the Local Housing Allowance covers at least 30% of market rents in for the area
- Suspension of evictions from social or private rented accommodation during the crisis
- Although the announced measures go a long way in addressing the concerns of businesses and individuals, the Government remains under pressure to do more for the self-employed.
- Rest assured we will keep you informed of further support available during this time.
If you have questions, please speak to your Magma contact or Shaf Bheda on [email protected].