Loans to help businesses through the economic turmoil caused by the coronavirus outbreak and relaxed rules on statutory sick pay are amongst the steps taken
The Government announced a number of emergency measures in the Budget on Wednesday, 11 March to help mitigate the impact of the coronavirus COVID-19 outbreak on the UK economy.
Statutory Sick Pay (SSP) will now be available for eligible individuals diagnosed with COVID-19 or those who are unable to work because they are self-isolating in line with Government advice. This is in addition to the change announced by the Prime Minister that SSP will be payable from day one instead of day four for affected individuals. People who are advised to self-isolate for COVID-19 will soon be able to obtain an alternative to the fit note to cover this by contacting NHS 111, rather than visiting a doctor. This can be used by employees where their employers require evidence.
Those who are not eligible for SSP, for example the self-employed or people earning below the Lower Earnings Limit of £118 per week, can now ‘more easily’ make a claim for Universal Credit or Contributory Employment and Support Allowance. For the duration of the outbreak, the requirements of the Universal Credit Minimum Income Floor will be temporarily relaxed for those who have COVID-19 or are self-isolating according to Government advice, ensuring self-employed claimants will receive support.
The Government will also bring forward legislation to allow small- and medium-sized businesses and employers to reclaim SSP paid for sickness absence due to COVID-19. The eligibility criteria for the scheme will be as follows:
- This refund will cover up to two weeks’ SSP per eligible employee who has been off work because of COVID-19;
- Employers with fewer than 250 employees will be eligible. The size of an employer will be determined by the number of people they employed as of 28 February 2020;
- Employers can reclaim expenditure for any employee who has claimed SSP (according to the new eligibility criteria) as a result of COVID-19;
Employers should maintain records of staff absences, but employees will not need to provide a GP fit note;
- The eligible period for the scheme will commence the day after the regulations on the extension of Statutory Sick Pay to self-isolators comes into force; and
- The government will work with employers over the coming months to set up the repayment mechanism for employers as soon as possible. Existing systems are not designed to facilitate employer refunds for SSP.
A new temporary Coronavirus Business Interruption Loan Scheme, delivered by the British Business Bank, is expected to launch in the next few weeks to support businesses to access bank lending and overdrafts. The Government will provide lenders with a guarantee of 80% on each loan (subject to a per-lender cap on claims) to give lenders further confidence in continuing to provide finance to SMEs. The Government will not charge businesses or banks for this guarantee, and the scheme will support loans of up to £1.2m in value. This new guarantee will initially support up to £1bn of lending on top of current support offered through the British Business Bank.
All businesses and self-employed people in financial distress, and with outstanding tax liabilities, may be eligible to receive support with their tax affairs through HMRC’s Time To Pay service. These arrangements are agreed on a case-by-case basis and are tailored to individual circumstances and liabilities. These businesses can contact HMRC’s new dedicated COVID-19 helpline for advice and support. To ensure ongoing support, HMRC has made a further 2,000 experienced call handlers available to support firms and individuals when needed.
Graham Vidler, CEO of the Confederation of Passenger Transport (CPT) commented: “The measures announced today by the Chancellor to support small businesses will be especially welcomed by coach businesses across the country.
“The coach and bus industry already has measures in place to ensure that it is playing its part in helping to slow the spread of the virus and continues to transport critical workers around the country. But if people choose or are required to travel less, the industry stands to be significantly affected and will require dedicated support from the Government. This includes greater flexibility to temporarily alter routes and commitments that existing funding for concessionary travel and contracted services such as home to school transport will be maintained even where passenger numbers fall or services are not required.
“Longer term, further measures such as the introduction of tax credits to help companies across the sector experiencing significant loss of revenue may also be required.”
The budget announcement also detailed new public sector investment, including the ‘largest ever investment in English strategic roads.’ The Government said it will spend over £27bn between 2020 and 2025, enough funding to fill in around 50 million potholes across the country and provide ‘unprecedented investment in urban transport,’ with £4.2bn for five-year, integrated transport settlements for eight city regions on top of £1bn allocated ‘to shovel-ready transport schemes.’
On this point, Graham Vidler added: “Coaches and buses are the cleanest way to travel on our roads and as the Government sets out further details on its £600bn plans to improve the country’s road network it is vital that every single road improvement includes measures to put coaches and buses first.
“With the Government committing to providing further details of its investment plans for buses at the Spending Review it is vital that it allocates at least £1bn to tackling congestion in our towns and cities to speed up bus journey times. By encouraging more people to travel by coach and bus through quicker journeys we will ensure that the UK is on track to meet its climate change targets and air quality goals.”
The Government announced that duty was being frozen on a lot of products, including fuel. Claire Haigh, the Chief Executive of Greener Journeys, commented: “We are extremely disappointed that the Chancellor missed this golden opportunity to end the freeze in fuel duty, especially given the sharp drop in the price of oil. As hosts of this year’s COP26 UN Climate Summit, the UK must show leadership on reducing greenhouse gas emissions. Ending the freeze in fuel duty would have sent a clear signal that the UK is serious about meeting its net zero target.
“Transport is the most polluting sector in the UK economy. The Government’s nine-year freeze in fuel duty has caused an extra 5 million tonnes of greenhouse gas emissions by encouraging people to abandon public transport in favour of their cars. It has also been damaging for public transport networks leading to 5% more traffic, 250 million fewer bus journeys and 75 million fewer rail journeys.”
For more details on measures announced in the budget, visit www.gov.uk/government/publications/budget-2020-documents