The Association for Consultancy and Engineering (ACE) has warmly welcomed Chancellor Rishi Sunak’s announcements on covering 80% of workers wages and a package of additional business support to help protect millions of people’s jobs and incomes as part of the national effort in response to coronavirus.
A new Coronavirus Job Retention Scheme will be set up to help pay people’s wages. Employers will be able to contact HMRC for a grant to cover most of the wages of their workforce who remain on payroll but are temporarily not working during the coronavirus outbreak. Any employer in the country- small or large, charitable or non-profit will be eligible for the scheme.
To ease cash flow pressures for UK VAT registered businesses, VAT bills from now until the end of June, will be deferred until the end of the tax year.
The Chancellor’s workers’ support package means:
- UK workers of any employer who is placed on the Coronavirus Job Retention Scheme can keep their job, with the government paying up to 80% of a worker’s wages, up to a total of £2,500 per worker each month. These will be backdated to 1st March and will be initially open for 3 months, to be extended if necessary.
- VAT payments due between now and the end of June will be deferred. No VAT registered business will have to make a VAT payment normally due with their VAT return to HMRC in that period.
- Income tax payments due in July 2020 under the Self Assessment system will be deferred to January 2021, benefitting up to 5.7m self-employed businesses.
- Additionally, the Coronavirus Business Interruption Loan Scheme, launched at Budget, will now be interest free for twelve months.
- HMRC are working night and day to get the unprecedented Coronavirus Job Retention Scheme up and running and ministers expect the first grants to be paid within weeks.
Chancellor of the Exchequer Rishi Sunak said: “We continue to do everything possible to protect the public from coronavirus. We have been working round the clock so that we can today confirm an unprecedented package of support to protect people’s jobs and wages. I said we would help individuals, businesses and the most vulnerable through this outbreak and I meant it. We will do whatever it takes in the weeks and months ahead.”
Business Secretary, Alok Sharma, said: “We have committed to doing whatever it takes to support businesses and households through these unprecedented times, and today shows just how far we are willing to go. This intervention is unheard of in peacetime, but it is crucial we stand behind our businesses and those that rely on them for work and income. All measures announced today across the business and welfare package are UK-wide.”
Hannah Vickers, chief executive of the Association for Consultancy and Engineering, said: “We are living in truly historic times, so this announcement should not come as a surprise. Yet the scale and scope of the Chancellor’s interventions are unprecedented. Business leaders within our membership base, our industry and across the wider economy will breathe a sigh of relief to see significant support on wages, procurement process changes to ease cashflow pressure and delays to VAT. Taken together, these measures will ensure businesses can weather the storm of COVID-19 and emerge fairly intact in the immediate term.
“With short term issues now put to bed, focus needs to turn to the medium term and our industries’ role in the economic recovery of the nation. We wrote to the Chancellor earlier in the week with a range of suggested measures to help our members develop our capability to do this, and we look forward to meeting with his team to discuss how we can ensure construction and infrastructure investment remains a catalyst for growth when normality returns.”