Yesterday Chancellor Rishi Sunak announced the new support schemes, which are part of his Winter economic plan to support and sustain jobs, the self-employed and businesses.
Support for the employed
As previously announced the current job retention / furlough scheme ends on 31st October.
It is replaced by the new Job Support scheme from the 1st November for a period of six months. This scheme is designed to support jobs and businesses that are sustainable in the longer term.
Under the new scheme the salaries of employees working fewer hours due to lower demand on services or products are supported.
- Employers will pay staff for the hours worked. This must be at least a third of their contracted or regular worked hours.
- The government and employer will each cover one third of lost pay
- This gives the employee an approximate salary of 77% of their usual pay.
- The grant is capped at £697.92 a month.
This scheme is open to all small and medium sized businesses across the UK, regardless of whether they used the furlough scheme. It may also be applicable for larger businesses who have seen a drop in turnover during the crisis.
Support for businesses
Adjustments have been made to payment terms for the Bounce Back loans and Coronavirus Business Interruption loans as follows:-
- An extension to the time for loans to be repaid to a maximum of 10 years.
- A payment holiday can be taken which will not affect credit rating.
- Or you can choose to switch to interest only payments for a period, again this will not affect credit rating.
The closing date for all business loan applications is extended until the 31st December this year. A new loan scheme will be launched in January with details to be announced in due course.
To date approximately £30bn of Vat has been deferred to March 2021. Businesses now have the option to clear this deferral over 11 equal instalments, starting March 2021, interest free.
Self-Assessment liabilities that are due 31 January 2021 can also be split into payments over a 12-month period.
The lower rates of tax at 5%, across Hospitality and Tourism sector will remain until 31 March 2021, instead of ending in January.
The above measures have all been designed to support businesses with their cash flow as they continue to manage their finances through the crisis.