Budget 2020

COVID-19 support for businesses and employees

This week on March 11 the chancellor announced the budget 2020, and among other things one of the most important announcement was the government’s respond to the businesses and employees directly affected by the Coronavirus (COVID-19).

The measures include:

Support for individuals

The Budget announces measures to support people who are unable to work because of COVID-19.

Statutory Sick Pay (SSP) will temporarily allow to be paid from the first day of sickness absence, rather than the fourth day, for people who have COVID-19 or have to self‑isolate. The government will also temporarily extend SSP to cover:

  • individuals who are unable to work because they have been advised to self-isolate
  • people caring for those within the same household who display COVID-19 symptoms and have been told to self-isolate

Medical Evidence for SSP – it is been advised that employers should use their discretion not to require a GP fit note for COVID-19 related absences. The NHS will put in place a temporary alternative to the fit note in the coming weeks which can be used for the duration of the COVID-19 outbreak. This will enable people who are advised to self-isolate to obtain a notification by calling NHS111 which they can use as evidence for absence from work, where necessary. (the system is not yet fully operational but government advises it will be ready in the coming weeks, please follow us for more updates in the coming days)

Those ineligible for SSP – Self-employed and employees below the Lower Earnings Limit are not entitled to SSP. They will get financial support by using the, ‘new style’ Employment and Support Allowance and Universal Credit.

  • ‘New style’ Employment and Support Allowance will be payable for people directly affected by COVID-19 or self-isolating from the first day of sickness, rather than the eighth day 
  • people will be able to claim Universal Credit and access advance payments where they are directly affected by COVID-19 (or self-isolating), without the current requirement to attend a jobcentre
  • for the duration of the outbreak, the requirements of the minimum income floor in Universal Credit will be temporarily relaxed for those directly affected by COVID-19 or self-isolating according to government advice for duration of the outbreak, ensuring self‑employed claimants will be compensated for losses in income.

Support for businesses

The government says that it recognises that some businesses may experience increased costs or disruptions to their cash flow as a result of COVID-19 and it is therefore providing support to businesses during this temporary period of COVID-19.

Statutory Sick Pay –Small, medium-sized businesses and employers will be refunded eligible SSP relating to COVID-19. The eligibility criteria for the scheme are as follows:

  • this refund will be limited to two weeks per employee
  • Only employers with fewer than 250 employees will be eligible. The size of an employer will be determined by the number of people they employed as of 28 February 2020
  • employers will be able to reclaim expenditure for any employee who has claimed SSP as a result of COVID-19
  • employers should maintain records of staff absences, but should not require employees to provide a GP fit note
  • the eligible period for the scheme will commence from the day on which the regulations extending SSP to self-isolators come into force

Business Rates Reliefs – To support small businesses affected by COVID-19 the government is increasing the Business Rates retail discount 100% for 2020-21. The relief will also be expanded to the leisure and hospitality sectors. The government has also announced in increase to a £5,000 Business Rates discount for pubs with a rateable value below £100,000 in England for one year from 1 April 2020.

Small business grant fundingSmall businesses that pay little or no business rates because of Small Business Rate Relief (SBRR) or the Rural Rate Relief will be eligible for £3,000 to meet their ongoing business costs. For a property with a rateable value of £12,000, this is one quarter of their rateable value, or comparable to 3 months of rent. It is not yet clear how businesses will access the grants.

Time to Pay

  • A time-limited deferral period on HMRC liabilities owed and a pre-agreed time period to pay these back for businesses and self-employed individuals in financial distress and with outstanding tax
  • HMRC has set up a dedicated COVID-19 helpline to help those in need, and they may be able to agree a bespoke Time to Pay arrangement. HMRC will also waive late payment penalties and interest where a business experiences administrative difficulties contacting HMRC or paying taxes due to COVID-19.

A new, temporary Coronavirus Business Interruption Loan Scheme, delivered by the British Business Bank, to support businesses to access bank lending (loans of up to £1.2 million) and overdrafts. The government will provide lenders with a guarantee of 80% on each loan and will not charge the businesses or banks for this guarantee.

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