Chancellor announces support for workers

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Earlier today the Chancellor announced a number of additional measures aimed at supporting businesses, with associated benefits for employees and self-employed individuals, during these uncertain economic times. 

The key areas of support announced today were as follows:

Coronavirus job retention scheme

All UK businesses will be eligible for the scheme and the intention is that HMRC will reimburse 80% of wages costs for applicable employees, up to a maximum of £2,500 per employee per month. The scheme will be open for three months initially and payments will be backdated to 1 March 2020. To be eligible the applicable employees will need to be retained on the payroll of the business but not actively working, instead they will need to be ‘furloughed’. 

Deferral of VAT and Income Tax payments

All UK businesses will be able to defer payment of any VAT liabilities arising up to 30 June 2020 and will have until the end of the current tax year to pay those liabilities. In a similar way, all self-employed individuals will be able to defer any self-assessment payments on account due by 31 July 2020 until 31 January 2021. 

Enhancement of the Coronavirus Business Interruption Loan Scheme 

The previously announced Coronavirus Business Interruption Loan Scheme has been enhanced so that rather than the ensuing loans being interest free for 6 months they will now not be subject to interest charges for 12 months. This scheme is intended to launch with effect from next week.  

Other support measures 

In addition to the above mentioned measures, the Chancellor also increased the Universal Credit standard allowance for the next 12 months by £1,000, and raised the working tax credit basic element by the same amount. 

As well as having the ability to to defer self-assessment payments, as mentioned above, self-employed workers will be able claim universal credit at a rate equivalent to statutory sick pay. 

At this stage only headline details have been provided about the various measures set out above. Further information about exactly how these reliefs will work, and how to access them, will be released over the coming days and we will provide regular updates as the relevant details emerge.