ICAEW hails Chancellor's 'unprecedented measures for unprecedented times'
20 March 2020: The Chancellor’s package of emergency measures has been welcomed by ICAEW, but the Institute has called for greater clarity around support for the self employed and how businesses can access the package of help available.
ICAEW has welcomed emergency measures announced by the Chancellor aimed at enabling companies to keep people in employment during the coronavirus crisis as a good start in the battle to keep the UK economy moving.
Rishi Sunak had earlier unveiled what he described as economic intervention “unprecedented” in the history of the British state, labelling the government's response as “one of the most comprehensive in the world”.
However, such unprecedented measures require huge amounts of detail, and the Institute has also called for greater clarity around which businesses are eligible and how affected organisations can begin to claim the grants, loans and reliefs offered by this and previous announcements.
Key measures announced by the Chancellor included:
- Under the new Coronavirus Job Retention scheme, government grants will cover 80% of the salary of PAYE employees who are not working but are furloughed and kept on payroll, up to a total of £2,500 a month. The scheme, open to any employer in the country, will cover the cost of wages backdated to 1 March 2020 and will be open before the end of April. It will continue for at least three months, and can include workers who were in employment on 28 February.
- The Coronavirus Business Interruption Loan Scheme will be interest-free for twelve months, not the six months previously planned. According to a British Business Bank statement, the scheme has been brought forward and is expected to become available in week commencing 23 March 2020.
- The next quarter of VAT payments will be deferred, meaning businesses will not need to make VAT payments until the end of June. Businesses will then have until the end of the financial year to repay the payments deferred.
- The next self assessment payment due on 31 July will be deferred until Jan 2021.
- Self employed people can now access full universal credit at a rate equivalent to statutory sick pay.
ICAEW CEO Michael Izza called the measures a “good start”, but stated that the real battle now is for public confidence. “If we can sustain that, the economics will follow,” said Izza. “The Chancellor's announcement of direct action by Government to keep people in employment is a really good start. This should make a difference to how people feel, and keep them working and spending.”
Iain Wright, ICAEW’s Director for Business and Industrial Strategy commented that the Chancellor has provided a level of support for employment that has “never been provided by the British state before”.
“The Government is clearly intending to ensure that employees and their jobs – regardless of size or sector – are protected in the face of enormous uncertainty and severe curtailment of demand and activity,” continued Wright. “The UK Government is looking to preserve people’s jobs, and that is welcome. I hope that this will provide some degree of reassurance to employees this weekend.
“The intention is clear but the detail will need to be worked up – the civil service has never before done anything on this magnitude regarding employment before and will need to set up systems and processes for cash to flow to businesses and then into workers’ pay packets from scratch.”
“This will take at least a few days and I’m confident that ICAEW and its members in businesses and practice stand ready in the national effort to help wherever possible and to ensure that workers of all businesses they run and advise are kept in employment.”