Following the Chancellor’s recent announcement regarding the Winter Economy Plan, this briefing outlines the key features.
Job Support Scheme
The Job Retention Scheme comes to an end on 31 October 2020. It will be replaced for six months, starting on 1 November 2020, with the Job Support Scheme, which is designed to protect viable jobs in businesses that are facing lower demand over the winter months due to Covid-19.
To be eligible, employees must work a minimum of 33% of their hours and businesses must pay equivalent wages. For the hours unworked, the business will pay 33% of wages and the Government will match this amount. A third of unworked hours will go unpaid.
For example, an employee working for 50% of their hours will receive 50% of their wages from the business for hours worked, and 16.6% of their wages from the business and 16.6% of their wages from the government for hours unworked. The remaining 16.6% unworked hours will be unpaid.
The scheme will be targeted at businesses that need it most – all small and medium-sized firms – but only for large companies if turnover has fallen by a third. Businesses can claim both the jobs support scheme and the jobs retention bonus.
Self-Employment Income Support Scheme
The Self-Employment Income Support Scheme extension (presumably mirroring the dates and length of the Job Support scheme above) will support viable traders who are facing reduced demand over the winter months, covering 20% of average monthly trading profits via a government grant.
Pay as you Grow
Borrowers under the Bounce Back Loan Scheme and the Coronavirus Business Interruption Loan Scheme will be offered the choice of more time and greater flexibility for their repayments. Loans can be extended from six to 10 years, almost halving regular repayments. Interest-only payments can be made, and firms in “real trouble” can suspend their repayments. The application deadline for all coronavirus loan schemes – including the Future Fund – has been extended to 30 November 2020.
Businesses who deferred their VAT will no longer have to pay a lump sum at the end of March next year. They will have the option of splitting it into smaller, interest free payments over the course of 11 months.
Self-assessed income taxpayers who need extra help, can now extend their outstanding tax bill over 12 months from January.
Tourism and Hospitality
The Government has extended the 15% VAT cut for the tourism and hospitality sectors to the end of March next year.
Source: News feed