Covid-19 Impact Brief: Thursday, March 4
Each week, our Public Policy team will be reporting on the latest weekly news in the evolving situation.
Chancellor, Rishi Sunak, has announced further Covid support measures in the budget
- The key announcements included:
- Furlough scheme extended until the end of September.
- Business rates relief will be extended, with eligible retail, hospitality and leisure businesses paying no business rates for 3 months, with up to 66% relief for the rest of the financial year.
- An extension of the 5% reduced rate of VAT for hospitality and tourism businesses until the end of September, as well as a further six month interim rate of 12.5%
- A further 600,000 self-employed people will be eligible for help as access to grants is widened. The grants will also be extended for 6 months.
- £5bn of new grants to help British businesses reopen when lockdown begins to ease with non-essential retail receiving up to £6,000 per premises and the hospitality and leisure sector receiving up to £18,000 per premise.
- £20-a-week top-up to universal credit to be extended for six months.
- Working Tax Credit claimants will also be given more support for the next six months, with a one-off payment of £500.
- A “super-deduction” for the next two years, meaning when companies invest, they can reduce their tax bill by 130%.
- £700m for arts, culture and sporting institutions.
- The incentive payments for new apprentice hires will be doubled, with £3,000 for each new apprentice hired between the 1st April to 30th September 2021.
- From 6 April 2021 the Recovery Loan Scheme will provide lenders with a guarantee of 80% on eligible loans between £25,000 and £10 million to give them confidence in continuing to provide finance to UK businesses.
- Small and medium-sized employers across the UK will continue to be able to reclaim up to two weeks of eligible SSP costs per employee – temporary during Covid-19.
- Any business that took advantage of the original VAT deferral on VAT returns from 20 March through to the end of June 2020 can now opt to use the VAT Deferral New Payment Scheme to pay that deferred VAT in up to eleven equal payments from March 2021, rather than one larger payment due by 31 March 2021, as originally announced
- To help otherwise-viable UK businesses which have been pushed into a loss-making position, the trading loss carry-back rule will be temporarily extended from the existing one year to three years. This will be available for both incorporated and unincorporated businesses.
- Corporation tax to rise to 25% from 2023 for businesses with profits over £250,000.
- Personal allowance and higher rate of tax to be from frozen next year until 2026.
The Northern Ireland Executive has set out a pathway to ease restrictions
- Unlike plans announced in England and Scotland, the blueprint does not include a timetable.
- The plan consists of 9 pathways, each of which has five phases.
- Step one of the recovery plan represents the current lockdown restrictions in place, with steps two to four allowing an easing of the rules and the final step entitled preparing for the future.
- The first easements will allow changes to rules on people meeting others outdoors at their homes, changes to restrictions in places of worship and a partial return to classroom teaching.
- The Executive will have a review every four weeks, where “all relevant indicators” will be examined. The dates for the reviews are 16 March, 15 April, 13 May and 10 June.
- The Northern Ireland Executive has also announced that visiting restrictions for care homes will be eased with social care facilities now able to facilitate one face-to-face visit per week per person, and one hour daily visits from one person will be permitted in hospices.
- Separately, the Scottish Government has announced that all primary school children will return on 15 March. A phased return to secondary school will also take place with years 4 – 6 taking priority – with all pupils expected to have returned by the Easter break.
- The Scottish Government also announced it will support the resumption of Scottish League football and other sports.
- The Government has introduced legislation to extend the airports slot allocation waiver. This will ensure that airlines do not have to operate flights at least 80% of the time to retain their slots. Due to expire in spring, the legislation to extend the waiver will come into force from 26 March 2021 – 2 days before the start of the summer slot season.
- International pupils from red list countries attending boarding schools in England will be allowed to self-isolate at their school rather than in a hotel according to Department for Education guidance. But pupils will only be allowed to self-isolate at their school if they travel from the airport in pre-arranged private transport organised by the school. International students must then quarantine in “physically self-contained” accommodation at the school.
- The Welsh Government has announced that Wales’ public services will receive an additional £682 million to support their Covid efforts over the coming months. Over £635 million of the package will be spent on the NHS and local councils to help them support the people of Wales over the next 6 months.
- Northern Ireland’s Finance Minister Conor Murphy has announced £25m for healthcare workers to offset the impact of National Insurance and tax deductions to recognition payments. A further £20m is being pledged for Localised Restrictions Support Scheme to continue financial assistance to businesses. To date over 13,800 businesses have benefited from £180m of support. He also allocated £500,000 to fund soft play facilities.