On 20 March the Chancellor responded to financial pressure brought to bear on businesses in the UK as a result of COVID-19 by announcing a package of unprecedented measures to support business through this period.
A highlight was the Coronavirus Job Retention Scheme, which is a grant for employers to cover 80% of the salary (up to £2,500 per month) of employees who are not able to work and have been ‘furloughed’ rather than being laid off. See here for our blog on this. HMRC is working urgently to set up a system of reimbursement because existing systems are not set up to facilitate payments to employers.
However, also significant were targeted tax deferral measures to help with cash flow:
At the Budget on 11 March the Chancellor launched expanded time to pay arrangements for other taxes paid by businesses and self-employed individuals in financial distress. HMRC has set up a dedicated COVID-19 helpline to agree bespoke arrangements for deferring tax payments with taxpayers. The automatic targeted deferrals outlined above, for VAT and income tax, go one step further and are welcomed.
In terms of tax cuts, so far the Chancellor has only announced business rates relief. See our blog here for further detail of the business rates holidays in England.
This document provides a general summary and is for information/educational purposes only. It is not intended to be comprehensive, nor does it constitute legal advice. Specific legal advice should always be sought before taking or refraining from taking any action.