Overview
Last night the Chancellor received praise for his overall support measures from an unusual quarter, with US Democrat Presidential Candidate Bernie Sanders stating that what was going on in the U.K. was “the proper approach.”
Today, the Chancellor described how the aim of the Government’s approach is to manage NHS demand, increase NHS capacity and take the right actions at the right time based on the science. He said there will need to be measures to right the ship once we are through this crisis and hinted the self-employed may face tax increases.
The Chancellor stated that the self-employed had not been forgotten. The grants for the self-employed he announced were less generous than those he had created for people on PAYE but the self-employed will be allowed to work while receiving them.
The Chancellor also stated the Government will tonight publish detailed guidance on the previously announced coronavirus job retention scheme for PAYE workers. Details of the Bank of England scheme to give investment grades to companies wanting loans will also be released shortly.
Home Secretary Priti Patel is reportedly looking to close UK borders to people arriving from coronavirus hotspots. The Home Secretary is, the Daily Telegraph suggests, seeking support for her plans to stop passengers being able to fly in to the UK from countries with high levels of infections such as Iran, the US and China. The Police have established checkpoints on some roads in North Yorkshire and other areas to stop drivers flouting the lockdown rules.
Former Prime Minister Gordon Brown has called for a form of world Government (temporary) to respond to the crisis. He argued that a taskforce involving world leaders, health experts and the heads of international organisations would be beneficial. This would have executive powers to coordinate the response.
The Chancellor’s package of support for the self-employed
The Chancellor stated the package had been compiled in collaboration with business and trade unions. Mr Sunak remarked on the differences between the tax treatment of the self-employed and the employed. He said there had been difficulties in putting together a support package for those that are self employed giving their different circumstances.
The measures he pledged for the self-employed included the following:
- Government will pay self-employed people a taxable grant up to 80% of their average monthly profits over last 3 years up to £2.5k a month.
- For those without 3 years of self-employment tax records the Government will look to average out over 3 years depending on what they have.
- The self-employed can apply for these grants and continue to do business.
- It is open to anyone with trading profits up to 50k.
- Available for those who make the majority of their income from self employment.
- Only those self-employed with a tax return for 2019 will be able to apply.
- For people newly self-employed they wont be eligible for this scheme.
- There will be verification checks on people claiming to be self-employed.
- 95% of the self-employed will benefit from the scheme.
- Self-employed should be able to access the scheme from the beginning of June but payments will be backdated.
- If eligible HMRC will contact you directly.
- Anyone who missed tax return deadline in January will be given 4 extra weeks from now.
- Self-employed can access business interruption loans and can access universal credit.
The Chancellor stated the scheme was fair, targeted and deliverable. He stated the UK would get through this and the overall package is one of the most generous in the world. However, the Government will not be able to save every job and business.
Government announcements
- The Secretary of State for Health and Social Care Matt Hancock has given immediate financial backing for all NHS trusts to provide free car parking to NHS staff for the duration of coronavirus (COVID-19).
- The Government has launched a portal for the registration of offers of help from business and individuals at https://www.smartsurvey.co.uk/s/L5B32S/
- A BEIS Business Support helpline has been made available at 0300 456 3565.
- The Cabinet Office have produced Guidance for leaders and fraud experts in government bodies and local authorities that are administering emergency programmes on behalf of the UK Government, they are mindful at the potential for abuse.
- The Government has ordered 10,000 ventilators from Dyson to help deal with the coronavirus crisis. The NHS currently has just over 8,000. It's estimated it will need at least 30,000 to deal with the potential flood of virus victims.
- The Coronavirus Act 2020 became law before Parliament went into recess yesterday, the powers it confers on Government are extensive and listed here.
- The Probation service are changing the ways they supervise released prisoners, to stop face-to-face meetings.
Government bodies/Regulators and Select Committees
- The Financial Conduct Authority (FCA), Financial Reporting Council (FRC) and Prudential Regulation Authority (PRA) have strongly recommended that listed companies review their timetables for publication of financial information in order to make appropriate use of the time available within regulatory deadlines to ensure accurate and carefully prepared Disclosures.
- The FRC has published guidance for companies preparing financial statements and a bulletin for auditors covering factors to be taken into account when carrying out audits during the current Covid-19 crisis.
- Rt Hon. Mel Stride MP, Chair of the Treasury Committee, has today written to Huw Evans, Director General of the Association of British Insurers (ABI), to seek answers on how the insurance sector is responding to coronavirus at a time when many will look to their insurer for both flexibility and assurance.
- Rachel Reeves, Chair of the Business, Energy and Industrial Strategy (BEIS) Committee, has written to Alok Sharma, Secretary of State for BEIS to call for clearer Government coronavirus guidance for workers to help address concerns that workers are being forced to go to work or that their employer is not offering enough support. Ms Reeves has also asked for clarification on rules for employers around social distancing.
- HMRC has launched a new helpline to help businesses concerned about paying their tax due to coronavirus (COVID-19).
Increased MP oversight of business practices
- Banks have been criticised by MPs for asking business owners seeking Government backed credit for their business to put up collateral to secure these loans (including their homes).
- The All-Party Parliamentary Group on Fair Business Banking tweeted: "There is confusion about [coronavirus business interruption loan schemes]. Treasury must issue clear guidance on parameters and not allow security at 'discretion of the lender' to muddy the waters. Unprecedented times require emergency funding. Keep it simple, and no [personal guarantees]."
- Labour MP and West Midlands Mayoral candidate Liam Byrne has launched a website for people to report businesses that are unfairly increasing prices during the coronavirus epidemic – he will report offenders to the CMA.