Last week, the Chancellor of the Exchequer announced additional measures to support businesses and organisations that have been impacted by the pandemic.
This includes the Government stepping in to help pay people’s wages – a scheme which is one of the most generous of any in the world – paying grants to support as many jobs as necessary. Any employer in the country who promises to retain their staff, can apply for a grant to cover most of the cost of paying people’s wages. Government grants will cover 80 per cent of the salary of retained workers up to a total of £2,500 a month, with this limit set well above the median income. The cost of wages will be backdated to 1st March and will be open for at least three months. The Government will consider extending the scheme for longer if necessary.
We are also deferring the next three months of VAT, a direct injection of £33 billion of cash to employers which means no business will pay any VAT in March, April or May; and they will have until the end of the financial year to repay those bills.
The Coronavirus Business Interruption Loan Scheme will now be interest free for twelve months, an extension from the initial announcement of six months. We have already introduced and announced an extension to the Business Interruption Loan Scheme, which is for small and medium-sized businesses. On Tuesday, the Chancellor expanded the amount that can be borrowed from £1.2 million to £5 million.