Chancellors Statement
Today (Thursday 24th September) the Chancellor outlined new packages to support businesses in what he has called the "Winter Economy Plan".
A summary is below. We will provide full details as soon as they are available.
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Job Support Scheme
- As previously announced furlough will end from the 31st of October 2020
- It will be replaced by the Job Support Scheme.
- It will be a six month scheme designed to "protect viable jobs in businesses who are facing lower demand over the winter months due to COVID 19"
- Employees eligible for the Job Support Scheme will receive at least 77% of their normal pay.
- 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.
- This means employees who can only go back to work on shorter time will still be paid two thirds of the hours for those hours they can’t work.
- The level of grant will be calculated based on employee’s usual salary, capped at £697.92 per month.
- All companies will be eligible to apply even if they did not use the furlough scheme
- It is targeted to small and medium businesses - larger businesses will need to prove they have been adversely affected by COVID.
- The employer can also apply for the Job Retention Bonus previously announced
- Self employed support is also being extended until the end of April - covering 20% of average monthly trading profits
We will provide full details of this scheme as soon as it becomes available
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VAT
- For businesses who deferred their VAT - they will no longer have to pay a lump sum at the end of March next year. Instead, they can split it into smaller, interest free payments over the course of 11 months. This is estimated to benefit over 500,000 businesses.
- For hospitality and tourism - the planned increased to VAT from 5% to 20% in January has been cancelled. The lower rate will remain until 31 March next year.
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Pay As You Grow
- For those businesses that took out the Government guaranteed Bounce Back loans during the crisis, the loan can now be extended from six months to ten years.
- They can also move to interest only payments or suspend payments if they are in "real" trouble for up to six months
- It will not affect your credit rating
- Coronavirus Business Interruption Loans (CBILs) will also be extended for up to ten years.
- There will be a new loan scheme in January
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