We have seen the Government announce measures to stimulate the economy and assist companies and employees through this difficult period by allowing statutory sick pay claims from day one; business rates relief; loans; and grants from local authorities. However, this has not stopped employers looking to reduce their wage bills and lay off staff. Today, Rishi Sunak is going to announce a wage subsidy which will hopefully support employers and enable them to retain their staff.
What will the wage subsidy look like? We have seen similar measures introduced throughout the globe. It may take the form of those already introduced such as:
The likelihood is that the UK's wage subsidy will incorporate aspects of the above with funds being given through employers to employees. HM Revenue & Customs does hold the payroll information from employers so should be able to pass the funds through in the form of "reverse NICs" where the funds go in the opposite way to usual PAYE payments.
What Rishi Sunak needs to provide for is those self-employed workers and workers in the gig economy on zero hour contracts where it is not so easy to assess and distribute the funds.
We anticipate it may take the form of a similar system to New Zealand with a set fee paid restricted to a number of employees.