The Chancellor announced that the government was committed to protecting jobs and livelihoods. Several support schemes are to be extended beyond end of the road map (currently scheduled to take place on 21 June) to accommodate the most cautious possible outcomes. Total public spending on Covid-19 support measures from 2020 to 2022 will eventually total £407 billion based on current announcements and support already given.
Furlough
The furlough scheme is extended to 30 September 2021. However, from July, employers will need to contribute toward it. Employees will still receive 80% of their pay, subject to a £2,500 per month cap, but for July, the government will only contribute 70% of this, meaning employers will need to pay the other 10%. For August and September, the government contribution will fall to 60%.
SEISS
The Self-Employment Income Support Scheme (SEISS) was also extended, with the announcement that there will be a fifth round of funding to apply from May to July 2021. The downside is that there will be a benchmark test, with claimants needing to show that their turnover has fallen by at least 30% to qualify for the full grant - which is 80% of average monthly profits, capped at £2,500. Where a claimant's profits have fallen, but by less than this benchmark amount, a smaller grant equal to 30% of average monthly profits may be available instead.
In terms of the fourth grant, i.e. that for February - April 2021, it was confirmed that claimants may now use their 2019/20 returns as evidence of profits. Unlike the previous tranches (which only looked at returns for the years to 2018/19), this means that people who were newly self employed in 2019/20 can now make a claim. The Chancellor estimated that this would open up the scheme to more than 600,000 people.
New wave of grants
There was also the announcement of a new Restart Grant up to £6,000 per premises for non-essential retail businesses. Businesses in the hospitality and tourism industry, as well as those offering leisure, personal care and accommodation may qualify for a larger grant of up to £18,000, owing to them having been more adversely affected by the lockdown restrictions, and likely to continue to be during the phased exit. They will also be required to stay closed longer under current plans.
Business rates
The business rates holiday for retail, hospitality and leisure businesses is extended until the end of June 2021. After this, rates will be discounted by two thirds - up to a value of £2 million for businesses who have had to close. A lower cap of £105,000 will apply to businesses that were able to remain open. An opt-out is available for businesses that were largely unaffected by Covid-19, or those who simply don't wish to take advantage.
New recovery loan scheme
The previously announced Recovery Loan Scheme was confirmed, replacing the Bounce Back Loan Scheme and Coronavirus Business Interruption Loan Scheme. This will provide businesses with loans from £25,000 to £10 million, with 80% of the amount guaranteed by the government. The scheme will open on 6 April and will be available until 31 December 2021. Invoice financing will be available between £1,000 and £10 million.
To qualify, a business must be able to show that it:
- is viable or would be viable were it not for the pandemic;
- has been impacted by the coronavirus pandemic; and
- is not in collective insolvency proceedings.
Tax credit claimants
The Universal Credit uplift of £20 per week will be extended by six months in mainland Great Britain, and the Northern Ireland Executive will receive funding at a level allowing them to match this for claimants there. There will also be a one-off payment of £500 for claimants of Working Tax Credits.
Apprentices
Incentives for businesses to hire apprentices will double to £3,000, and the government extending the end date to 30 September 2021. The apprentice can be of any age but must be a new hire to qualify
