With the Autumn Budget cancelled the Chancellor has announced a Winter Economy Plan introducing a package of measures to support businesses.
The highlights are:
The Coronavirus Jobs Retention Scheme (CJRS) – Will end as planned on 31 October 2020.
A new Job Support Scheme – To support viable UK employers who face lower demand due to COVID-19, and to keep their employees attached to the workforce, the government will be introducing a new Job Support Scheme from 1 November 2020. Employees will need to work a minimum of 33% of their usual hours. For every hour not worked the employer and the government will each pay one third of the employee’s usual pay, and the government contribution will be capped at £697.92 per month. Employees using the scheme will receive at least 77% of their pay, where the government contribution has not been capped. The employer will be reimbursed in arrears for the government contribution. The employee must not be on a redundancy notice. The scheme will run for six months from 1 November 2020.
Self-employed Income Support Scheme (SEISS) Grant Extension – 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 scheme will last for 6 months, from November 2020 to April 2021. The extension will be in the form of two taxable grants. The first grant will cover a three-month period from the start of November until the end of January. This initial grant will cover 20% of average monthly trading profits, paid out in a single instalment covering 3 months’ worth of profits, and capped at £1,875 in total. The second grant will cover a three-month period from the start of February until the end of April. The government will review the level of the second grant and set this in due course.
Extending the temporary VAT reduced rate for hospitality and tourism – The government is extending the temporary reduced rate of VAT (5%) from 12 January to 31 March 2021.
Extension of access to finance schemes – The government is extending the four temporary loan schemes, to 30 November 2020 for new applications.
Pay as you Grow – The government will give all businesses that borrowed under the Bounce Back Loan Scheme the option to repay their loan over a period of up to ten years. UK businesses will also have the option to move temporarily to interest-only payments for periods of up to six months, or to pause their repayments entirely for up to six months.
Coronavirus Business Interruption Loan Scheme (CBILS) loan extension – The government intends to allow CBILS lenders to extend the term of a loan up to ten years, providing additional flexibility for UK-based SMEs who may otherwise be unable to repay their loans.
VAT deferral ‘New Payment Scheme’ – The government will give businesses which deferred VAT due in March to June 2020 the option to spread their payments over the financial year 2021-2022. Rather than paying in full at the end of March 2021, businesses will be able to choose to make 11 equal instalments over 2021-22. Businesses will need to opt in.
Enhanced Time to Pay for Self-Assessment taxpayers – The government will give taxpayers more time to pay taxes due in January 2021, building on the Self-Assessment deferral provided in July 2020. Taxpayers with up to £30,000 of Self-Assessment liabilities due will be able to use HMRC’s self-service Time to Pay facility to secure a plan to pay over an additional 12 months.
Full details of the announcement are here: