Winter Economy Plan to help businesses

Today, 24th September 2020, Chancellor Rishi Sunak has announced the government’s Winter Economy Plan including a range of measures to help businesses during the winter months:

Job Support Scheme

The Job Support Scheme is designed to protect viable jobs in businesses who are facing lower demand over the winter months due to Covid-19, to help keep their employees attached to the workforce. The scheme will open on 1 November 2020 and run for 6 months.

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. This means 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.

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. 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.

Click here to read more.

Pay as You Grow

More than one million businesses which have borrowed under the Bounce Back Loan Scheme will be offered the choice of more time and greater flexibility for their repayments. Lenders have been enabled to offer Coronavirus Business Interruption Loan Scheme borrowers more time to make their repayments where needed.

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. These measures will further protect jobs by helping businesses recover from the pandemic.

Loan Schemes extended

Extension of applications for the government’s Coronavirus loan schemes until the end of November – Coronavirus Business Interruption Loan Scheme, the Coronavirus Large Business Interruption Loan Scheme, the Bounce Back Loan Scheme and the Future Fund.

This change aligns all the end dates of these schemes, ensuring that there is further support in place for those firms who need it.

Self-employment Income Support Scheme (SEISS) 

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 – ensuring our support continues right through to next year.

Click here to read more about the SEISS grant extension.

More Time to Pay for Self-assessed Income Tax Payers

A 12-month extension from HMRC, meaning payments deferred from July 2020, and those due in January 2021, will now not need to be paid until January 2022.

5% VAT

The rate of VAT applied on most tourism and hospitality-related activities will be cut from 20% to 5% until 31st March 2021. Read more about this here.

VAT Deferral

Businesses who 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.

More details will be announced soon and this page will be updated as we receive this.

All business support can be found here on the government’s website.