The Chancellor has announced a package of measures to protect millions of people’s jobs and support incomes, including the self-employed, as part of the national effort in response to coronavirus.
The Chancellor described the actions being taken as representing an unprecedented economic intervention, which, combined with previous announcements on public services and business support, will be one of the most comprehensive in the world.
The new measures are summarised below.
Coronavirus Job Retention Scheme
- A new Coronavirus Job Retention Scheme is being set up and any employer in the country – small or large, charitable or non-profit – will be eligible for the scheme.
- Employers will be able to contact HMRC for a grant to cover most of the wages of people who are not working but are given a leave of absence and kept on payroll, rather than being laid off.
- Government grants will cover 80% of the salary of retained workers up to a total of £2,500 a month, meaning that workers can retain their job, even if their employer cannot afford to pay them, and be paid at least 80% of their salary. Employers can top up salaries further if they choose to.
- The Scheme will cover the cost of wages backdated to March 1st and will be open initially for at least three months – and will be extended for longer if necessary.
- No limit is being placed on the amount of funding available for the scheme. The Government will pay grants to support as many jobs as necessary.
- HMRC are working night and day to get the scheme up and running and it is expected that the first grants will be paid within weeks. The aim is to get everything in place before the end of April and detailed guidance will be available shortly.
- To help businesses pay people and keep them in work, the next quarter of VAT payments is being deferred, i.e. no business will pay any VAT from now until the end of June and they will have until the end of the financial year to repay those bills.
Measures for the Self-Employed
The safety net for self-employed people will be strengthened by suspending the minimum income floor for everyone affected by the economic impacts of coronavirus, meaning that every self-employed person can now access, in full, Universal Credit at a rate equivalent to Statutory Sick Pay for employees
Protecting people’s jobs and incomes
The Chancellor stressed that the Government is doing its best to stand behind businesses and in turn they are being asked to do their best, to stand behind UK workers; therefore, businesses should look very carefully at the support available before making decisions to lay people off.
The CBI and the TUC have welcomed the measures which come at such a critical time after a recent People Management and CIPD poll of over 390 employers found 63% of respondents cited general anxiety during the coronavirus outbreak as their organisation’s main challenge with concerns about wellbeing, job security and employees not being able to work from home.
Should you require any assistance with your employment arrangements during this difficult period, do not hesitate to contact the Co-Head Partners of our Employment team. Please get in contact with Ewan Keen at 020 3206 2724 or via email and Tamara Ludlow at 020 3206 2739 or via email.