The Government have announced the Winter Economy Plan, here’s a summary of the key aspects:
Support for workers
- A new Job Support Scheme will be introduced from 1 November 2020.
- 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.
- 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.
- Employees must be working at least 33% of their usual hours. The level of grant will be calculated based on employee’s usual salary, capped at £697.92 per month.
- The Job Support Scheme will be open to businesses across the UK even if they have not previously used the furlough scheme, with further guidance being published in due course
Tax cuts and deferrals
- The temporary 15% VAT cut for the tourism and hospitality sectors has been extended to the end of March 2021.
- Businesses who deferred their VAT liabilities will be given more breathing space through the New Payment Scheme, which gives them the option to pay back in smaller instalments.
- Self-Assessment taxpayers will be able to benefit from a separate additional 12-month extension from HMRC on the “Time to Pay” self-service facility.
Giving businesses flexibility to pay back loans
- Businesses who took out a Bounce Back Loan can utilise a new Pay as You Grow flexible repayment system. This will provide flexibility for firms repaying a Bounce Back Loan.
- This includes extending the length of the loan from six to ten years. Interest-only periods of up to six months and payment holidays will also be available to businesses.
- Those who obtained Coronavirus Business Interruption Loans can also extend the length of loans from a maximum of six to ten years if it will help businesses to repay the loan.
- Applications for the government’s coronavirus loan schemes can be made up to the end of November 2020.
For the initial guidance please read the announcement at: https://www.gov.uk/government/news/chancellor-outlines-winter-economy-plan
We will provide further information once detailed guidance is announced by the government on how the Job Support Scheme will operate.
If you have questions, we are happy to speak to you, so please feel free to contact one of our team. Please bear with us whilst we work remotely and are able to call or email back to your enquiry.