The chancellor Rishi Sunak lifted the lid on a package of assistance to help businesses deal with the economic crash caused by the coronavirus crisis on Friday, March 20.
Rishi Sunak said the Government will step in to help pay people’s wages ‘for the first time in history’.
In a momentous press conference, the chancellor announced a raft of packages to support businesses that will come as a welcome relief to car dealers across the country.
Coronavirus Job Retention Scheme
The chancellor said Government grants will cover 80 per cent of the salary of retained workers up to a total of £2,500 a month. The scheme will cover the cost of wages backdated to March 1 and will be open before the end of April.
Coronavirus Business Interruption Loan Scheme
An interest-free loan scheme announced last week has been extended from six months to 12 months for businesses. Details of how to apply will be rolled out on Monday.
Deferred VAT payments
In a huge boost to cash flow, the chancellor deferred all VAT payments due in the next quarter to the end of June.
Mr Sunak said: ‘You’ll have until the end of the financial year to repay those bills. That’s a direct injection of over £30bn of cash to businesses equivalent to 1.5% of GDP.’
Universal credit and tax credit boost
The standard Universal Credit allowance and the Working Tax Credit basic allowance are both being increased by £1,000-a-year.
He said these measures will benefit over four million of our most vulnerable households, but he said the UK is already seeing job losses as a result of the pandemic.
Sick pay for the self-employed
The minimum income floor for Universal Credit is to be suspended, said the chancellor, so all those who are self-employed can access Universal Credit at the rate equivalent to statutory sick pay for employees. This will help many who assist dealers on a contract basis.
Self-assessment payments deferred
For self employed dealers there was relief too as they will not have to make any further payments on their self-assessment tax return until 2021.
Commenting on the announcements Mike Hawes, SMMT chief executive, said: ‘The Chancellor’s unprecedented package of emergency funding and tax support will come as a huge relief to automotive companies of all shapes and sizes as they battle to safeguard their businesses and support thousands of workers and their families who otherwise face hardship.
‘99% of UK automotive output is now halted meaning thousands of businesses are counting their future, not in months or weeks, but in days. We need these measures implemented swiftly and will work closely with government and our members to keep this critical and fundamentally competitive sector alive.’
Source and additional reporting: PA Media