Winter economy plan
New Support for Businesses and Employees
Today, 24th September, the Chancellor Rishi Sunak announced the next wave of support for businesses and employees.
New Jobs Support Scheme
The Chancellor unveiled his new Coronavirus Jobs Support Scheme (CJSS) which will come into play the day after the existing Coronavirus Job Retention Scheme (CJRS) finishes at the end of October.
Here are the facts:
- 6-month scheme
- Starting 1st November 2020
- Employees will need to work at least 33% of their hours
- Hours not worked will be covered 1/3 by Government and 1/3 by Employer
- Employees should get 77% of their usual pay and days not worked are funded by 1/3 Government, 1/3 Employer and 1/3 not paid
- The grant will be capped at £697.92 per month
- All small and medium sized businesses will be eligible for the scheme
- Larger businesses will be eligible if their turnover has fallen during the crisis
- Open to all employers across the UK, even if they haven’t previously used the furlough scheme
Self Employed Support
The Chancellor has extended the self-employed grant on similar terms to the Job Support Scheme.
The Self-Employment Income Support Scheme has been extended until 30th April 2021 and a grant will be available to those eligible for this scheme. The grant will cover three months’ worth of profits for the period November to end of January 2021. It will cover 20% of average monthly profits up to a total of £1,875.
A further grant may be available to self-employed to cover February 2021 to the end of April 2021.
Self-assessed income taxpayers who need extra help can now extend their outstanding tax bill over 12 months from January.
VAT for Hospitality and Tourism Sectors
Chancellor Rishi Sunak also announced the continuation of the reduced VAT for the hospitality and tourism sectors until 31st March 2021.
Extension for BBLS and CBILS – Pay As You Grow
The government has announced a ‘pay as you grow’ plan and are to support over 1 million businesses to relieve pressure on their finances and cashflow by extending the application period for four government-backed loan schemes to the end of the year as well as changing the terms of repayment for BBLS and CBILS – these can now be extended from 6 to 10 years.
Here are the facts:
- CBILS and BBLS repayments can now be extended to 10 years – cutting monthly repayments by nearly half
- Businesses struggling can move their repayments to interest only for six months
- Businesses “in real trouble” can apply to suspended repayments for six months
- Businesses will not see their credit rating fall as a result
- There will be a new loan scheme announced in January 2021
VAT Deferral
Businesses who deferred their VAT will no longer have a lump sum to pay at the end of March 2021. They will have the option to split into smaller, interest frees payments over the course of 11 months.
As the government provides more detailed guidance on the new measures we will of course provide updates as they are available.
