A new package of support measures for businesses.
To further protect jobs and support businesses today the Chancellor Rishi Sunak outlined the Winter Economy Plan. The package of measures announced plan to help businesses through the uncertain months that lie ahead as the nation continues to tackle the spread of the virus.
Since the beginning of the pandemic one of the government’s main focuses has been to minimise the damage to our economy and their primary goal in relation to economic policy has been to support people’s jobs.
The Chancellor began by confirming the furlough scheme will end at the end of October and that support must adapt and evolve, with that he unveiled a new Job Support Scheme.
The Job Support Scheme
The Job Support Scheme will be launched on 1st November and run for six months. The idea is to protect viable jobs in businesses who are facing lower demand to normal due to coronavirus.
Employers will continue to pay the wages of staff for the hours they work but for the hours not worked, the government and the employer will each pay one third of their equivalent salary. In order to support only viable jobs, employees must work at least 33% of their typical hours.
All small and medium-sized businesses are eligible, but larger businesses must show their turnover has fallen during the crisis. Employers can benefit from this scheme even if they did not use the Furlough scheme.
Businesses can benefit from both the Job Support Scheme and the Jobs Retention Bonus, announced in Summer, in order to help protect jobs.
For self-employed individuals the Government is extending the Self Employment Income Support Scheme (SEISS).
For the hospitality and tourism industry the temporary reduction of VAT from 20% to 5% will remain in place until 31 March 2021.
Businesses who deferred their VAT bills, between March and June 2020 can now make 11 smaller interest-free payments during the 2021-2022 financial year instead of paying a lump sum in full at the end of March 2021.
Additionally, self-assessment taxpayers can benefit from a separate additional 12-month extension from HMRC. Payments deferred from July 2020, and those due in January 2021, will now not need to be paid until January 2022.
Government Loan Schemes
With the introduction of the new Pay as You Grow flexible repayment system any business who took out a Bounce Back Loan has been granted greater flexibility with regards to their repayments. The length of the loan has also been extended from 6 years to 10 helping to reduce the monthly repayment amounts significantly. Interest-only periods of up to six months and payment holidays will also be available to businesses.
There are plans for Coronavirus Business Interruption Loan Scheme (CBILS) lenders to also have the ability to extend the length of loans up to 10 years if it will help businesses to repay the loan.
To enable even more businesses to benefit from the government’s coronavirus loan schemes, applications for all of these have been extended until the end of November. This includes the Coronavirus Business Interruption Loan Scheme, the Coronavirus Large Business Interruption Loan Scheme, the Bounce Back Scheme and the Future Fund.
These are bold measure and some of the most generous and comprehensive economic plans in the world. The over-arching goal is to further protect jobs and help businesses to recover from the pandemic.
Over the coming days we can expect more details to be released but for now should you have any initial queries, please do get in touch with us, our fabulous team are on hand to assist you. Call 0800 112 0880 or email [email protected]