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News Item

Economic scenario by the OBR predicts tough times ahead

April 15, 2020

Economic scenario by the OBR predicts tough times ahead

The Office for Budget Responsibility has published an economic scenario based on an assumption that there will be a three-month lockdown followed by another three-month period where measures are partially lifted. The OBR, provide independent and authoritative analysis of the UK’s public finances, does not attempt to predict how long the economic lockdown will last – that is a matter for the Government, informed by medical advice. It does, however, aim to illustrate some of the potential fiscal effects of the coronavirus crisis on the UK economy. For now, the assumption is that there will be an economic shock with real GDP falling 35 per cent in the second quarter, but bouncing back quickly. The scenario also sees unemployment rising by more than 2 million to 10 per cent in the second quarter. If the scenario proves to be correct, then lockdown would end around mid-June and restrictions would end mid-September. Actual timescales will depend on how successful the public health measures are in containing the outbreak.


Self-Employment Income Support Scheme

Updated guidance has been released for the government’s Self-employment Income Support Scheme (SEISS), providing further clarity on the claiming of grants and how HMRC will work out total income and trading profits

Updates to the guidance cover:

=         Detail of the treatment of losses, averaging and multiple trades

=         Clarifications on the calculation of self-employed profits and what is meant by total income

=         Confirmation that individuals can continue working, including taking on employment

=         Confirmation that owner-managers of Ltd companies can access the Coronavirus Job Retention Scheme for their salary

=         Confirmation that individuals can access Universal Credit and the Self-employment Income Support Scheme

=         Clarification on overlaps between the Self-employment Income Support Scheme and Coronavirus Job Retention Scheme

(e.g. you can claim the SEISS and continue working).


Coronavirus Job Retention Scheme

Updated guidance has been released for the government’s Coronavirus Job Retention Scheme to provide further clarity on checking eligibility for the scheme and how to claim.

Updates to the guidance cover:

=         Confirmation of what should form the basis for furlough pay for employees furloughed on return from (maternity/paternity/shared parental/adoption/sick/parental bereavement) leave;

=         Confirming employees subject to TUPE transfer/ business reorganisation/ payroll consolidation can be furloughed

=         Confirming position for contractors in scope of IR35 in the public sector

=         More information on what information employers need to claim the grant, clarifying circumstances whre an employee shouldn't be furlonghed by multiple employers.

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