Coronavirus is spreading in the UK, and the number of confirmed cases has risen from only a few to nearly 6,000. It pushed goverment to take measures to control such as close schools, pubs, restaurants, send employers work from home etc. But how does the economy work when employees return home to work? Who pays? Faced with this difficult problem, the British government took the initiative and they made an unprecedented decision:
Chancellor of the Exchequer, Rishi Sunak on announced on March 17 that the British government will provide 330 billion pounds of loans to businesses. For industries affected by the epidemic, such as retail, catering, and entertainment, the British government will exempt businesses from 12-month business tax and provide £ 25,000 in cash support for each business. For the 700,000 smallest businesses in the UK, the British government will provide cash support of 10,000 pounds each. Individuals struggling with the epidemic can delay repayment of loans. National companies can temporarily avoid paying 30 billion pounds of VAT. To protect employment, the government will pay 80% of salaries for employees who cannot work due to the virus outbreak, up to a maximum of 2,500 pounds per month. Sunak said the decision was to stop employers from cutting staff because of the outbreak.
“I know that people are worried about losing their jobs, about not being able to pay the rent or mortgage, about not having enough set by for food and bills… to all those at home right now, anxious about the days ahead, I say this: you will not face this alone,” Mr Sunak added
1. For employees
1) Job retention plan
Employers with financial support can continue to retain jobs and continue to pay part of their salaries for those employees who should have been fired in the crisis.
2) Wage subsidy plan
The government will pay employees up to 80% of the salary subsidy, with a maximum monthly limit of 2,500 pounds. This plan will be implemented from March 1st and last for 3 months. Will be extended if necessary
Sunak said the government is doing its best to support employers and hopes that employers will also do their best to support workers.
2. For businesses
1) Deferred payment of VAT and income tax
The government has delayed the payment of VAT by 3 months, and the extension will be from March 20, 2020 to June 30, 2020
2) Catering retail
For industries affected by the epidemic, such as retail, catering, and entertainment, the British government will exempt businesses from 12-month business tax. A grant of £ 25,000 is also offered.
3) For Small and middle companies
The British government will provide a subsidy of £ 10,000 for small businesses with a tax value of less than £ 15,000, and a subsidy of £ 25,000 for businesses with a taxable value between £ 15,000 and £ 51,000. At the same time loans of up to 5 million pounds were provided to SMEs.
4) For large companies
The government will issue new lending instruments to help support liquidity between large companies and help them achieve cash flow through loans.
3. Self-employed persons
For self-employed people, self-assessment is based on past personal income and tax payable. If income is less than £ 118 per week, you can apply for general credit or new employment and support allowances. The payment of personal income tax was also extended from July 2020 to January 2021.
4. Housing subsidies
Starting in April, the government increased the local housing subsidy rate to 30% of the market rent. This applies to all new or existing “universal credit” housing element claimants as well as existing housing benefit claimants.
The British move is undoubtedly unprecedented, so many people have commented that Britain temporarily entered “wartime” communism. The Financial Times estimates that as many as 3 million people work in areas severely affected by the epidemic. If 1 million people apply for support each month in these 3 months, the plan will cost 3.5 billion pounds. However, in the face of a brief but terrible shock of this magnitude resulting in a complete stoppage of the economy, this move should save tens of thousands or even more people in employment.
Not only that, the UK will also provide free treatment for new coronary pneumonia, including any foreigners who reside illegally in the UK. Foreigners in the UK include immigrants, students, overseas employees, tourists, refugees and asylum seekers.
It seems that the British government has taken many positive measures, and we will continue to pay attention to the latest news. Take care and stay safe!