UK COVID-19 Measures: UK Prime Minister’s Daily Press Conference
Latest COVID-19 Measures Announced at The UK Prime Minister’s Daily Press Conference - 29th May 2020
Following yesterday’s announcement of the re-opening of certain shops and bars, today the Chancellor of the Exchequer, Rishi Sunak, provided further details on the way in which employers will begin financially contributing to the new flexible Coronavirus Job Retention Scheme. The Chancellor also announced a final August payment for those on the Self-Employed Income Support Scheme, which was originally scheduled to close this weekend.
Government Daily COVID-19 Press Conference
During today’s press conference from Downing Street, the Chancellor of the Exchequer, Rishi Sunak, announced further details on the way in which the updated Coronavirus Job Retention Scheme (CJRS) will operate. Sunak was joined by Stephen Powis, Medical Director for the NHS.
The Chancellor began by announcing that the country is “past the peak” and is “flattening the curve” as the number of COVID-19 fatalities continues to fall. He continued by stating that over the coming weeks, the Government will take careful but deliberate steps to begin the reopening of the economy. He added that the ‘new normal’ will mean businesses need to become COVID-secure to protect staff and customers, people will need to stay alert as they go about their daily lives and the Government will need to adapt the emergency measures which have been put in place to support the country through the crisis.
Explaining the modifications to the CJRS, which has supported millions of jobs and businesses, the Chancellor stated that employers will be expected to begin “modest” contributions from August. The timeline for the evolution of the scheme includes:
- From August, employers will begin paying National Insurance and pension contributions (accounting for 5 per cent of total employment costs). The Treasury’s contribution to wages will remain at 80 per cent;
- By September, employers will be expected to begin paying towards wages, with taxpayers contributing 70 per cent of the grant and employers 10 per cent;
- At the end of October the scheme will close but throughout that month taxpayers will contribute 60 per cent and employers the remaining 20 per cent.
Sunak clarified that the new flexible CJRS will be in place from July 1st and will allow employers the maximum flexibility to choose the right arrangements for them and their staff. Employees will be able to return to work part-time whilst still receiving support from the scheme. These new changes mean that the current scheme will close for new entrants on June 10th.
Finally, the Chancellor announced that the Self-Employed Income Support Scheme, which has had 2.4 million applicants, will be extended with a final payment being given on August 1st.
Total UK COVID-19 Cases
|24 hours||Cumulative total|
|Deaths in all settings||324||38,161|
Summary of UK COVID-19 Business Support Schemes
Beginning with the measures announced in the Budget on 11th March, the UK Government has announced a series of economic interventions aimed at supporting employees, employers and businesses through the uncertainty and potential loss of income resulting from the COVID-19 crisis and the restrictions on business activity as a result. The Government has established a business support web portal with details on eligibility and how businesses can apply for support. A summary of those measures of potential relevance to FTI Consulting’s clients is listed below.
Employment retention measures
Coronavirus Job Retention Scheme: Employers can claim 80% of their usual monthly wage costs for furloughed employees, limited to £2,500 per individual per month, plus the associated Employer National Insurance and minimum automatic enrolment employer pension contributions. Claims can be made to cover the period 1st March – 31st October 2020. From August furloughed workers will be able to work part-time, with employers sharing salary costs with the Government. Amendments to the scheme announced on 29 May include the following: From August, employers will begin paying National Insurance and pension contributions and the taxpayer contribution will remain at 80 per cent; By September, employers will be expected to begin paying towards wages, with taxpayers contributing 70 per cent of the grant and employers 10 per cent; Throughout October taxpayers will contribute 60 per cent and employers the remaining 20 per cent.
Coronavirus Statutory Sick Pay Rebate Scheme: The Government will refund eligible Statutory Sick Pay costs to all employers with fewer than 250 employees. This applies to any claim arising as a result of Covid-19, including precautionary self-isolation, and is limited to two weeks per employee. The online service for reclaiming coronavirus sick-pay scheme is now live, with HMRC guidance on eligibility found here.
Self-employed Income Support Scheme: Most self-employed workers will qualify for a grant of up to 80% of average monthly profits, capped at a maximum of £7,500 per month and covering three months’ earnings. The scheme will be open to those with trading profits no greater than £50,000 and who have experienced a loss in earnings as a result of the COVID crisis. At least half of a claimants’ income must come from self-employment, and they must be trading when an application is made, or would be except for COVID-19 disruption. Applications opened on 13 May 2020 and a final funding payment is accessible on 1 August.
Business disruption financing measures
Coronavirus Commercial Financing Facility: The Bank of England’s new commercial financing facility is designed to support large companies of investment grade standing. It allows qualifying businesses to issue short-term debt of up to one-year maturity, which will be purchased by the Bank of England. The intent is to support short term liquidity, mitigating against cashflow disruption.
Bank of England Term Funding Scheme: The Bank of England has introduced a new Term Funding Scheme with additional incentives for small businesses financed by the issuance of central bank reserves. Over the next 12 months, the scheme will offer four-year funding of at least 5% of participants’ stock at interest rates at, or very close to, Bank Rate.
Coronavirus Large Business Interruption Loan Scheme: Intended to provide otherwise viable companies with access to short-term liquidity. It provides financing of up to £200m in the form of loans, overdrafts, or invoice and asset finance to businesses with an annual turnover in excess of £45m. Lending is for a maximum of three years. Individual lending limits apply, determined using the existing Enterprise Finance Guarantee. Lenders will be one of 40 accredited institutions, including all major high-street banks. To incentivise them to lend, the Government – through the British Business Bank - is guaranteeing 80% of the value of a loan. Companies that borrow over £50 million through the scheme will be subject to restrictions on dividend payments, senior pay and share buy-backs.
Coronavirus Business Interruption Loan Scheme: Intended to provide otherwise viable companies with access to short-term liquidity. It provides financing of up to £5m in the form of loans, overdrafts, or invoice and asset finance to businesses with an annual turnover below £45m. Lending is for a maximum of six years and the Government will pay the first 12 months’ interest. Individual lending limits apply, determined using the existing Enterprise Finance Guarantee. Lenders will be one of 40 accredited institutions, including all major high-street banks. To incentivise them to lend, the Government – through the British Business Bank - is guaranteeing 80% of the value of a loan.
Bounce Back Loan Scheme: Intended to support micro-businesses with short-term cashflow concerns as a result of the COVID crisis. Loans will be made available through accredited lenders to businesses with an annual turnover below £200,000 a year, capped at a maximum of 25% of that figure. The Government will act a guarantor for 100% of the loan, increasing the chance of acceptance and ensuring the loan doesn't need to be secured against personal assets. The Government will pay interest for the first year, with no repayments will be due during those 12 months.
Small Business Grant Funding: Individual grants of £10,000 will be made available through local authorities to businesses eligible for Small Business Rate Relief (SBRR) that already pay little or no business rates.
Trade Credit Insurance Guarantee: Businesses with supply chains that are reliant on Trade Credit Insurance may apply for support from the Government. The Government will now temporarily guarantee business-to-business transactions currently supported by Trade Credit Insurance, ensuring the majority of insurance coverage will be maintained across the market. The Trade Credit Insurance (TCI) guarantee will cover over £171 billion business activity currently insured and the transactions between around 13,000 suppliers and 650,000 buyers.
Tax relief measures
VAT Deferral: The Government has deferred VAT payment demands for the next quarter, meaning that no business will be required to pay outstanding VAT until the end of June. Businesses will have until the end of the year to reconcile any accumulated tax debts.
Deferral of Self-Assessment Payment: Income tax payments due under Self-Assessment on 31st July 2020 will be deferred until 31st January 2021. All self-employed individuals will be eligible.
Temporary Changes to the Statutory Residence Test: For the period between 1st March and 1st June 2020, any period spent in the UK by individuals working on COVID-19 related activities will not count towards residence tests that potentially bring global earnings within the purview of UK taxation. These changes are designed to allow skilled individuals to come to the UK and help respond to the pandemic.
Support for Businesses Paying Tax: HMRC have established a dedicated COVID-19 helpline to support businesses and self-employed individuals unable to meet tax demands. Bespoke Time to Pay arrangements will be offered to those businesses with a legitimate need and support their recovery while navigating temporary financial challenges. HMRC will also waive late payment penalties and interest where a business experiences administrative difficulty due to COVID-19.
Targeted support measures
Future Fund: Targeted at fledgling UK businesses backed by private equity that have suffered from COVID-related disruption, the future fund will provide a convertible loan facility of £125,000 - £5m. To qualify, the company must have raised at least £250,000 in equity investment from third party investors in the last 5 years. The loan must be matched by new third-party investment and be used for working capital. Term length is for a maximum of 3 years, after which any outstanding debt will be converted into stock. The scheme will launch in May and will initially be open until September 2020.
Innovate UK Investment Fund: A £750 million fund for targeted support for R&D-focused small businesses is being made available through Innovate UK’s grants and loan scheme. The majority of the money has been allocated to support existing Innovate UK customers on an opt-in basis. However, grants or loans of up to £175,000 will be provided to approximately 1,200 businesses not currently in receipt of Innovate UK funding, provided they otherwise meet the criteria for Innovate funding. The first payments will be made by mid-May.
Cash Grant for Retail, Hospitality and Leisure: A cash grant of up to £25,000 will be made available to businesses in England operating in the retail, hospitality and leisure sectors with a rateable value of between £15,000 and £51,000. Businesses in these sectors with a rateable value of under £15,000 will receive a grant of £10,000.
Business Rates Holiday for Retail/Hospitality/Leisure venues: A 100% business rates holiday will be applied from 1st April for a period of one year to all retail, hospitality and leisure venues, including shops, pubs, restaurants and theaters. There is no limit to rateable values.
Business Rate Holiday for Nurseries: Nurseries in England will not have to pay business rates for the 2020-21 tax year. This will apply to properties occupied by providers on the Government’s Early Years Register and are used for the provision of nursery education.
Reopening High Streets Safely Fund: Councils across England will receive access to a new £50 million fund to allow Local Authorities to help support practical and health & safety measures designed to facilitate the quick and safe reopening of non-essential high street and retail spaces in the near future. Councils will also be able to use this money to develop local marketing campaigns to explain the changes to the public and reassure them that their high streets and other commercial areas are safe.
Business Support Checker Tool: The UK Government have released a new “support find tool” on the form of a self-assessed questionnaire for businesses and self-employed people across the UK, to allow them to quickly determine what financial support is available to them, to handle the consequences of the pandemic.
Extension Period on Filing Accounts: Businesses can apply for an additional three months to file accounts with Companies House to help avoid penalties as they deal with the impact of COVID-19. Applications can be made through a fast-track online system.
Coronavirus Business Support Hub: Businesses can now access a new online portal which aims to compile “key information for businesses including on funding and support, business closures, your responsibilities as an employer and managing your business during coronavirus. The hub also includes information for self-employed people and sole traders.”
Business interruption Insurance: The Government has confirmed that the business impact of Government measures to slow the spread of the COVID-19 virus provides sufficient grounds for businesses to claim on their insurance where they have appropriate business interruption cover in place.
Workplace Skills Learning Platform: The Government has introduced a new online platform that gives people access to free, high-quality digital and numeracy courses to help build up their skills, progress in work and boost their job prospects. The platform provides individuals with free access to several courses designed to boost workplace skills as individuals continue to socially distance at home.
Protection for commercial tenants: The Government has introduced temporary measures to safeguard commercial tenants from aggressive debt recovery actions. Statutory demands and winding up petitions issued to commercial tenants have been temporarily voided and new protections introduced in the use of Commercial Rent Arrears Recovery. Landlords have been asked to work collaboratively with businesses unable to meet rent demands.
Flexible Insolvency rules: Changes will include allowing businesses undergoing restructuring to continue trading and receive supplies. There will also be a temporary suspension of wrongful trading provisions for company directors to remove the threat of personal liability, which will apply retrospectively from 1st March.
Gender Pay Gap Reporting Suspension: The Government Equalities Office has suspended requirement for businesses to report gender pay gap data for the reporting year 2019/20.
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