Today, the government announced new measures to control the spread of coronavirus…
COVID-19, the illness caused by coronavirus, has now taken the lives of 177 people in the UK, so the government has taken the decision to close all bars, restaurants and cafes to the public. They can continue to offer takeaway services, but won’t be allowed to serve customers on-site. Nightclubs, theatres, cinemas, gyms and leisure centres will also close their doors as the country comes together in a huge national effort to slow the spread of the virus. But what does it mean for businesses and employees?
Unprecedented measures for unprecedented times
This is an unprecedented move that will have a massive impact on the economy, so the Chancellor has announced a raft of new measures to support both businesses and employees. “I have a responsibility to make sure that we protect as far as possible people’s jobs and incomes,” Rishi Sunak explained. “Today I can announce that for the first time in our history, the government is going to step in and help to pay people’s wages. We’re setting up a new coronavirus retention scheme. Any employer in the country, small or large, charitable or non-profit, will be eligible for the scheme.”
The Coronavirus Job Retention Scheme will grant businesses up to 80% of the cost of employees who’ve been furloughed but kept on the payroll. These grants, which will be provided by HMRC, will cover individual wages up to £2,500 a month, which is just above the median income. The scheme will cover wages from 1st March 2020 and will run for at least 3 months, but the Chancellor has said that it will be extended if necessary. There’s no limit to the amount of funding available.
This is an unprecedented situation, so HMRC are building the systems from scratch. They’re working day and night to get the scheme up and running as soon as possible – in fact, the first grants are expected to be paid in a few short weeks. However, this may not be soon enough for some businesses, so they’re launching the Coronavirus Business Interruption Loan Scheme on Monday and these loans will now be interest-free for 12 months instead of six. In addition to this, VAT payments for the next quarter will be deferred to the end of June and businesses will have until the end of the financial year to repay those bills.
These measures, though extraordinary, may not save every job, so for the next 12 months, they’re increasing the Universal Credit Standard Allowance and the Working Tax Credit Basic Element by £1,000 a year. This will help 4 million of the most vulnerable households. They’re also suspending the minimum income floor for everyone affected by the economic impact of coronavirus, so the self-employed can access Universal Credit to the equivalent of statutory sick pay, and the next self-assessment will be deferred to January 2021. Together, these schemes represent £7 billion of economic support.
This is the biggest move to control the coronavirus outbreak to date and it will impact the lives of millions of people, but it’s necessary to stop the spread of the virus and save lives, so although it may be a shock, especially for those directly affected, let’s remember why we’re doing it.Credit: Chapter 81