The Chancellor Rishi Sunak has presented his ‘Winter Economy Plan’ today, outlining how the Government will support jobs and the economy over the coming months.
We welcome the additional measures set out to support businesses at this time.
Here is a summary of the key points which could impact you and your business:
The New Job Support Scheme
Central to the plan is a new Job Support Scheme. This scheme will last six months from 1st November and is designed to protect viable jobs in businesses facing lower demand over the winter months.
Under the scheme, 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.
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 existing Job Retention Bonus Scheme remains in place.
The VAT Deferral can be paid in instalments
If you have deferred your VAT payment, you will no longer have to pay this back as a lump sum at the end of March 2021. Instead, you can now split this payment into 11 smaller interest-free payments during the 2021-22 financial year.
Extension to existing Government Loan Schemes
Applications for the following Government-backed loan schemes have been extended until 30th November:
• The Coronavirus Business Interruption Loan Scheme (CBILS)
• Coronavirus Large Business Interruption Loan Scheme (CLBILS)
• Future Fund Scheme
• Bounce Back Loans
CBILS lenders will also be able to extend the terms of the loans from a maximum of six years up to 10 years, to help businesses recover from the effects of Covid-19.
‘Pay as You Grow’ flexible Bounce Back Loan repayment system
If you have made use of the Bounce Back Loan Scheme, you will be offered the choice of more time and greater flexibility for your repayments.
These loans can also now be extended from six to 10 years, nearly halving the average monthly repayment.
In addition, if you are struggling when it comes to the repayment period, you can choose to make interest-only payments or apply to suspend repayments all together for up to six months.
Extension of the Self-Employment Income Support Scheme (SEISS)
The Government is extending its support for the self-employed under this scheme.
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 Covid-19. 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.
Extension to 5% VAT Rate for the Tourism and Hospitality Sector
For businesses in the tourism and hospitality sector, the 5% VAT rate has been extended until the end of March 2021.
We will continue to work with our clients to make the most of these new measures.
To discuss any of the above points, please call us on 01249 712074.
Stay safe and well
The Clear Vision Team