‘Whatever it takes’ – the mantra of the past few weeks from the Government, and this evening the Chancellor appears to have pulled out all the stops to keep people in work.
Following talks with Trade Unions and the precedents set by other countries, there was a level of expectation, but at first glance, then the Government has listened to the comments this week that loans are not enough. The support looks as follows:
- A grant (not loan!) to cover 80% of the wages for employees who are laid up from work up to £2,500 per month. This will come via HMRC but we don’t know quite how yet. This is initially for 3 months, but could be extended.
- This will be backdated from 1 March to help those already in trouble – so details need to follow pretty quickly!
- No business will need to make a VAT payment until June, with amounts deferred
- The Loan assistance promised earlier in the week, will now have interest free elements for 12 months and not 6
- A housing allowance to cover home rent payments to a certain allowance for certain people
- Increases to Universal Credit and Working Tax Credits of £1,000 each per year
- Deferral of self-assessment payments in July to January 2021 (although unclear if this is for all tax payers or just self employed).
Pubs, restaurants and leisure businesses (except for take outs) would need to close tonight at midnight. However, along with the support announced earlier in the week, the above measures may give those venues a chance.
There is no view on how this will be funded, but we think we are working in an environment of doing whatever it takes now and work out how to pay for it later!
We will await to see the detail over the weekend and provide a full update on Monday but overall, this is a welcome move and on the face of it, thank you!