COVID-19: ‘Winter Economy Plan’ to support businesses
28 Sept 2020 – The Chancellor has announced the Government’s ‘Winter Economy Plan’ to support businesses continuing to be affected by the coronavirus pandemic.
Job Support Scheme
A new six-month Job Support Scheme will be introduced from 1 November to protect jobs in businesses that are facing lower demand over the winter due to coronavirus.
The Government will contribute towards the wages of employees who are working fewer than normal hours due to decreased demand. 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.
In order to support only viable jobs, 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.
A Fact Sheet on how the Scheme works and some example scenarios is available HERE
Self-employment Income Support Scheme
The Government will extend the Self-Employment Income Support Scheme (SEISS) grant. An initial taxable grant will be provided to those who are currently eligible for SEISS and are continuing to actively trade but face reduced demand due to coronavirus.
The initial lump sum will cover three months’ worth of profits for the period from November to the end of January next year. This is worth 20% of average monthly profits, up to a total of £1,875.
An additional second grant, which may be adjusted to respond to changing circumstances, will be available for self-employed individuals to cover the period from February 2021 to the end of April.
A Fact Sheet on how the Scheme works is available HERE
Eligible businesses that deferred their VAT bills will be given more breathing space through the New Payment Scheme, which gives them the option to pay back in smaller instalments. Rather than paying a lump sum in full at the end March next year, they will be able to make 11 smaller interest-free payments during the 2021-22 financial year.
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, meaning payments deferred from July 2020, and those due in January 2021, will now not need to be paid until January 2022.
VAT cut for Tourism & Hospitality
The Government will extend the temporary 15% VAT cut for the tourism and hospitality sectors until the end of March 2021.
Coronavirus Loan Schemes
The Chancellor will extend applications for the Government’s coronavirus loan schemes until the end of November. This covers the Coronavirus Business Interruption Loan Scheme, the Coronavirus Large Business Interruption Loan Scheme, the Bounce Back Loan Scheme and the Future Fund.
A new Pay as You Grow flexible repayment scheme will support businesses that took out a Bounce Back Loan. This includes extending the length of the loan from six years to ten, which will cut monthly repayments by nearly half. Interest-only periods of up to six months and payment holidays will also be available to businesses.
Coronavirus Business Interruption Loan Scheme lenders will be given the ability to extend the length of loans from a maximum of six years to ten years if it will help businesses to repay the loan.
More detail on the Coronavirus loan schemes is available HERE