UK state support for business and workers reaches new heights

Unprecedented measures for coronavirus crisis include paying 80% of wages, new loans, benefits boost, rent help and VAT deferral

Rishi Sunak said an unprecedented level of state protection will be offered to support businesses and workers through the coming months to prevent the coronavirus outbreak bringing the economy to its knees.

The chancellor's second package of measures since he announced a 30bn rescue operation at the budget earlier this month, has been developed in recent days in response to criticism that previous efforts would fail to prevent thousands of companies going bust.

VAT deferral. No businesses will pay VAT until the end of June, a deferral of tax payments for another quarter. At a cost of 30bn, companies will not need to pay what VAT is owed until the end of the year.

The coronavirus business interruption loan scheme will be interest-free for 12 months, instead of the initially proposed six. The move will let companies apply for the fund even when the worst of the virus outbreak has died down. It reflects warnings from economists that the ripple effects of the virus could take much of the year to dissipate

Universal credit standard allowance will be increased by 1,000. Tax credit allowance will also be increased. This will benefit 4 million low-income families, Sunak said, and with other measures to boost benefit payments cost 7bn.

Measures for the self-employed, previously denied payments if they are off work sick, will be able to access sickness benefit of 94.25 a week.

Rent support of 1bn support for renters following an increase in the housing benefit element of universal credit to cover 30% of market rents in local areas. The chancellor said that renters will receive this top-up to match mortgage subsidies announced in his last package.

Other measures. Previously, Sunak said cash grants worth 25,000 would be made to retail, leisure and hospitality firms to help them survive the period of turbulence. Businesses with fewer than 100 employees in the country across all sectors of the economy will be able to seek grants worth 10,000.