On the 24th September, in the face of a resurgent Coronavirus pandemic, Chancellor of the Exchequer Rishi Sunak, announced a package of new measures to support the economy, branded “The Winter Economy Plan”.
The team at Our Head Office have put together a summary of the main points of the announcement, so you can get back to running your business.
Read on below for all the details.
A Job “Support” Scheme
A new Job Support Scheme will replace the Coronavirus Job Retention Scheme (the “furlough” scheme) which ends 31st October and will run for six months from 1st November.
It is hoped that the scheme will allow employers to reduce worker’s hours rather than making them redundant.
For every hour not worked by an employee, when compared to their usual working hours, they will be paid 2/3’s of their normal wage. The government will cover 1/3 of the wage, the employer will cover 1/3, and the worker will lose out on 1/3. The Government’s contribution will be capped at £697.92 per month.
To be eligible employees would have needed to be employed as at 23rd September, and must work at least a minimum of 33% of their usual hours.
The reduction in hours will not affect eligibility for the Job Retention Bonus payments.
Self-Employed Grant Extension
The Self-Employed Income Support Scheme is to be extended with a further two grants becoming available over the next six months.
The first grant will cover November 2020 – January 2021 and will be based on 20% of average monthly trading profits (capped at £1,875).
Details of the second grant, covering February to April 2021 are due to be announced soon.
Help with Cash Flow
Under new “pay-as-you-grow” rules, existing bounce back loans can be extended from six to ten year repayment terms.
Businesses can also temporarily move to interest-only payments for a period of six months (an option which can be used up to three times), or pause their repayments entirely for up to six months (an option they can use once and only after having made at least six payments), all without affecting their credit rating.
CBILS holders will now have a Government guarantee extended to 10 years.
Furthermore, all loan schemes will remain open for new applications until 30th November 2020 and a further new loan scheme is being devised for January 2021.
Kicking the bill down the road
Businesses who deferred VAT payments to 31st March 2021 will now be able to pay these in eleven interest free instalments.
Taxpayers who deferred their July 2020 Income Tax Payments on account to 31st January 2021 will now be able to pay these over a twelve-month period but will likely incur interest on these amounts.
Lower Vat = More Fun
The temporary cut to 5% VAT for the hospitality and tourism sectors has been extended to 31st March 2021.
It is encouraging to see further support from the Government, but as always with such schemes, the devil is in the detail. As a business owner it is import you get these details right. Failure to do so could add penalties, interest, and visits from the tax man to your existing headaches. Let us help you to get it right, call us today for a chat.