Yesterday, the Chancellor Rishi Sunak MP unveiled this year’s Budget and the coronavirus took centre stage. Tom Jones and Jennifer Pinder examine the announcements, and what the 2020 Budget means for employers and employees.
As the coronavirus continues to spread in the UK, both employers and employees are faced with almost unprecedented uncertainty over the immediate future. Where do employees stand if they have to self-quarantine, and how will businesses cope with the predicted staff shortages and reduced footfall on the high street?
In response, Chancellor Sunak unveiled a package of measures designed to help both workers and employers. The most significant reliefs for employers are the extension of statutory sick pay, the abolition of some business rates, and the introduction of a new business interruption loan.
Statutory sick pay
Any employee who is advised to self-isolate, even if they do not show symptoms of Coronavirus, will be paid statutory sick pay from the first day of self-isolation, as opposed to the 4th day which is the usual position.
This measure is intended to encourage employees to self-isolate but as it’s predicted that 20% of the entire UK workforce will be infected by the virus, this could represent a huge cost to employers. This will likely hit SME’s particularly hard.
To combat this, businesses with less than 250 employees will be eligible for a full refund of up to 14 days statutory sick pay paid to employees off work due to Coronavirus.
Business rates will be abolished for this financial year only, for any retail businesses with a rateable value of below £51,000.
In addition, any business that is currently eligible for small business rates relief will be eligible for a cash grant of £3,000.
Business interruption loan
SMEs may also be able to access a “business interruption loan” of up to £1.2million. The UK government will offer a guarantee on those loans covering up to 80% of losses, with no fees attached to cover shortfalls in cashflow.
The total of these (and other measures, such as speeding up testing) represents a £30bn rescue package. The measures are aimed at smaller businesses and so far, there is little to assist organisations that fall outside the SME definition. Whether this changes will depend on how widespread the coronavirus becomes in the UK, but as it stands, we certainly expect the virus, and the disruption it causes, to have a significant impact on the UK economy.
If you would like to discuss the 2020 Budget, or what steps you can take to safeguard your business against the impact of the coronavirus, please contact our Employment Team.