With the government loan schemes coming to an end at the end of September and the Coronavirus Job Retention scheme ending at the end of October, Chancellor Rishi Sunak has announced his ‘Winter Economy Plan’ for businesses and jobs. New measures have been announced such as the Jobs Support Scheme, Pay as you Grow and continued VAT cuts.
Job Support Scheme
The scheme is has been outlined for 6 months, starting 1st November, employees must be working a minimum of one-third (33%) of their hours, the government and employer will each pay 33% of the remaining 66% of the wages. Therefore, employees working 33% of their hours will receive at least 77% of their pay. All SME businesses are eligible.
For more information, visit: https://www.gov.uk/government/publications/job-support-scheme
Tax cuts and deferrals
The government announced an extension of the temporary 15% value added tax (VAT) cut for the tourism and hospitality industries. This will continue until the end of March 2021, claiming to support businesses in a several impacted industry. Businesses who deferred VAT bills will also be given more time to pay with the New Payment Scheme, giving them the option to pay back in smaller instalments as opposed to a lump sum in March, including 11 interest-free payments during the 2021-22 financial year. This is set to support up to half a million businesses.
In addition, around 11 million self-assessment taxpayers will be granted a 12-month extension from HMRC on the ‘Time to Pay’ self-service facility. This means that payments deferred from July 2020 and those due in January 2021 will now be delayed until the following January 2022.
For more information, visit: https://www.gov.uk/government/news/chancellor-outlines-winter-economy-plan
Pay as You Grow
For more than a million businesses who took out a Bounce Back Loan the Pay as You Grow flexible repayment system will give companies he option to extended the length of a loan from six years to ten, cutting monthly repayments by nearly half. Interest-only periods of up to six months and payment holidays will also be available. In addition, the Coronavirus Business Interruption Loan Scheme lenders have been granted the ability to extend loans from six to ten years to help businesses repay the loan.
The coronavirus loan schemes have also been extended until the end of November, giving businesses the opportunity to benefit from CBILS, CLBILS, the Bounce Back Loan Scheme and Future Funds.
For more information visit: https://www.gov.uk/government/news/chancellor-outlines-winter-economy-plan