The Government have announced a huge £330 million war chest to help businesses through the period of economic uncertainty.
1. Salaried (PAYE) workers
The Coronavirus Job Retention Scheme guarantees 80% of the salary of eligible
workers, up to a ceiling of £2,500/month. This applies in situations where otherwise the worker would be laid off or made redundant. As such, you cannot receive this money and continue to work.
Under this scheme, all UK employers will be able to access support to continue paying part of their employees’ salary for those employees that would otherwise have been
It would be applicable to those designated as ‘furloughed workers’ (people absent
temporarily from work), and the HMRC will reimburse 80% of furloughed workers wage
costs, up to a cap of £2,500 per month. This would run for an initial 3-month period, and
possibly longer. HMRC are working urgently to set up a system for reimbursement.
This will hopefully keep a sizeable part of the workforce in their jobs and deliver
an income stream for them through this difficult period.
2. Self-Employed workers
A similar set-up for those eligible, with 80% of the self-employed workers’ average
earnings over the last three years (if applicable), up to a maximum of £2,500
■ This scheme will deliver a taxable cash grant of 80% of a self-employed workers’
profits, up to £2,500 per month.Those eligible will able to both claim and
continue to work.
The scheme will be open to those with a trading profit of less than £50,000 in 2018-
19, or an average trading profit of less than £50,000 from the previous three financial
years (2016-17, 2017-18 and 2018-19).
Another qualification is that more than half of the income in these periods must come
■ The scheme would cover a minimum period of 3 months, and possibly be extended beyond that. The initial period covered would run to the 3 months up to May, but the complexity of setting it up would mean the backdated payment would not occur until
the beginning of June.
■ As self-employed status can be open to interpretation, do contact HMRC now to see if you are eligible.
■ Particularly as the government also announced that those who pay themselves a salary and dividends through their own company are not covered by the scheme, but will be
covered for their salary (up to the eligible amount) via the Coronavirus Job Retention Scheme (see above).
3. Mortgage payers
The reduction in the Base Rate to 0.1% should benefit the mortgage deals on offer. However, a sizeable number of higher Loan to-Value deals have been pulled, partly due to
the increased workload faced by lenders. This increased workload relates, to some extent, to supporting customers who are experiencing issues with their finances due to COVID-19, including payment holidays of up to 3 months.
4. Those off work
All of those advised to self-isolate – or caring for those self-isolating – will be entitled (if
eligible) to Statutory Sick Pay (SSP). For those who cannot claim SSP (such as the
self-employed), there will be alternative comparable support through the welfare
system. Additionally, the normal welfare options are in place, if unemployed.
The recent Budget introduced a number of initiatives, such as the £30bn of support to stimulate the economy and help counter the impact of coronavirus. And following the Budget, the Chancellor announced that he would make available a further initial £330bn of government-backed loans to assist firms of all sizes through this period.
Recognising the impact on many small and medium-sized businesses, assistance will also be delivered in areas such as reclaiming Statutory Sick Pay (SSP), business rates help,
possible grants, more time to pay tax, and deferring VAT payments.