Following Rishi Sunak’s briefing on 24 September, below is a summary of the key points.
Job Support Scheme
- The Government will subsidise the pay of employees who are working fewer than normal hours
- It applies to employees who can work at minimum of 33% of their normal hours
- Employers will pay staff for the hours they do work
- For the hours they cannot work, the Government and the employer will each cover one third of lost pay
- The Government grant is capped at £697.92 per month
- All SMEs will be eligible
- Its open to all employers in the UK, regardless of whether they accessed the furlough scheme, as long as they have a UK bank account and a UK PAYE scheme
- Employers can claim both the Job Support Scheme and the Jobs Retention Bonus (one off payment of £1,000 for every employee who remains continuously employed until 31 January 2021)
- The employer will be reimbursed in arrears for the Government’s contribution
- The employee must not be on a redundancy notice
- The scheme runs for 6 months starting 1 November 2020
Support for the self employed
- The SEISS is extended on similar terms to the Job Support Scheme above
- The grant will cover 3 months profits from November 2020 to January 2021
- The grant will cover 20% of average monthly profits up to a cap of £1,875
- The grant will be limited to self-employed individuals who are currently eligible for the SEISS and are actively continuing to trade, but are facing reduced demand due to Covid-19
- The grant will be paid in a single instalment
- A further grant will be available to cover February 2021 to the end of April 2021, and the Government is to review the level of this grant in due course
Business loans
- Bounce Back Loans will be extended from 6 to 10 years
- CIBLS lenders will also be able to extend the length of loans from 6 to 10 years
- The deadline for the Government’s loan schemes is extended to the end of November 2020
- Businesses can choose to make interest only payments for 6 months and those in ‘real trouble’ can apply to suspend repayments altogether for 6 months
- Credit ratings will not fall as a result of this
VAT
- The 15% emergency VAT cut on tourism and hospitality will be extended from January 2021 to 31 March 2021
- Businesses who deferred their VAT liabilities due in March to June 2020 will be able to pay those liabilities in 11 smaller interest free instalments over the financial year 2021/22
- Rather than paying in full at the end of March 2021, as was previously stated, businesses will be able to choose to make 11 equal instalments over 2021/22
- All businesses that took advantage of the VAT deferral can use the New Payment Scheme
- Businesses will need to opt in, but all are eligible
- HMRC will put the opt in process in place in early 2021
Tax
- The Government will give the self-employed and other taxpayers more time to pay taxes due in January 2021
- Self-assessment taxpayers will be able to defer tax payments to 31 January 2022
- Taxpayers with up to £30,000 of self-assessment liabilities will be able to use HMRC’s Time to Pay facility to secure a plan to pay over an additional 12 months
- This means that self-assessment liabilities due in July 2020 will not need to be paid in full until January 2022
More detail on all of the above announcements can be found in the Winter Economy Plan policy paper on the HM Treasury website.
If you have any questions at all please do not hesitate to contact us.
