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UK Government COVID-19 measures
Japan tax newsletter 9 April 2020
In a series of announcements, the UK Government have set out what they have called a package of "temporary, timely and targeted measures" to support public services, people and businesses through the disruption caused by the COVID-19 outbreak. The measures focus on supporting employment, providing cash flow support to businesses and increasing welfare support.
Areas being addressed:
- Providing liquidity through financing schemes
- Helping employers to protect jobs
- Business support through removal of fixed costs and provision of grants
- Cash-flow support, including tax deferrals
- Administration, including governance
- Benefits entitlements
These aims are primarily being delivered through:
- The banking system in terms of both financing schemes that have been announced;
- The central tax system (covering cash tax deferral and employment support) as well as the local tax system (for business rates and cash grants); and
- The benefit system (for Universal Credit), though Statutory Sick Pay will be paid by employers and reimbursed to them
As with the Budget (see here for our earlier Alert), there are a number of measures targeted at supporting small- and medium-sized businesses, which are unlikely to have a significant impact on Japanese groups. For large Japanese corporates operating in the UK, the key potential items of interest should be access to short term funding, deferral of certain tax payments, business rate holidays and also Government contributions to wages.