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March 25, 2020

UK government announces emergency regulations and legislation amid COVID-19

Temporary changes to Statutory Sick Pay and financial relief for small and medium businesses are being provided to support workers and businesses who face disruptions.

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Following the release of the annual budget on 12 March 2020, the UK government announced emergency regulations and made commitments to enact emergency legislation to provide relief to workers who face disruptions caused by the global COVID-19 pandemic.

Final regulations and pending, emergency legislation include changes to Statutory Sick Pay (SSP), which are summarised below:

  • SSP will be available for eligible workers who have been diagnosed with COVID-19 or are otherwise unable to work because they are adhering to advice to self-isolate
  • SSP, which normally become available after four (4) days of illness, will be available from the first day of illness or inability to work. This change will be retroactive to 13 March 2020
  • Workers who are following advice to self-isolate will be able to obtain an alternative to the “fit note” (statement of fitness for work) by contacting the National Health Service (NHS 111), rather than by visiting a doctor. Employees can use this whenever the employer requires evidence of illness

It should be noted that the weekly rate for SSP was already scheduled to increase from £94.25 per week to £95.85 per week, effective with the new tax year beginning 6 April 2020.

The UK government has also announced plans for targeted financial relief to small and medium businesses to help reclaim SSP paid for sickness absences due to COVID-19. The refund is intended to cover up to two (2) weeks per employee. Employers may read more about this here.

In addition, the emergency legislation that is being considered will allow the government to expedite changes to national insurance contributions if the government determines that is necessary to help respond to the COVID-19 outbreak.

Scotland: Tax bands, and rate changes, and local relief measures

While the Scottish Parliament approved changes to Scottish tax rates earlier this month, it remained an open question about when the tax changes would actually go into effect. Typically, tax changes go into effect with the start of the new tax year, or 6 April 2020. But that will not be the case for Scotland this year. The HMRC has confirmed that the rate changes will become operative from 11 May 2020 – the government needed time to make required changes to tax coding calculations.

In addition, the Employment Allowance will increase by £1,000 to £4,000. This change, however, will go into effect on 6 April 2020.

The Scottish Government has also announced measures to support businesses through the impact of COVID-19, worth £2.2 billion. These include a £1 billion business support fund, and a 1.6% rates relief for owners of non-domestic properties, including businesses.

Please note that these developments are happening quickly and there is uncertainty regarding some of the details, including the duration of some of the relief. We will continue to monitor developments related to COVID-19.

Disclaimer: The information provided in this post is provided for informational purposes only and should not be relied upon or construed as legal advice and does not create an attorney-client relationship. You should review with your legal advisors how the laws identified in this post may apply to your specific situation.

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