The chancellor Rishi Sunak announced the government’s plan to protect jobs and support businesses over the winter months on 24 September 2020.
The announcements included the following:
- A new Job Support Scheme
- An extension of the Self Employment Income Support Scheme
- Tourism and hospitality sector VAT cut extension
- Coronavirus Loan payback terms extended
Coronavirus Job Support Scheme
The key highlights of the new Job Support Scheme are:
- The government will subsidise the pay of employees who are working fewer than normal hours due to lower demand.
- Workers must do at least a third of their normal hours.
- Employers will pay staff for the hours they work.
- The government and the employer will pay a third each for the hours they cannot work.
- The grant will be capped at £697.92 per month per employee.
- All small and medium sized businesses will be eligible for the scheme.
- Larger business will be eligible if their turnover has fallen during the crisis.
- It will be open to employers across the UK even if they have not previously used the Coronavirus Job Retention Scheme “Furlough Scheme.”
The scheme replaces the Coronavirus Job Retention Scheme “Furlough Scheme” and will run for six months starting from 1 November 2020.
The new scheme significantly decreases the amount the government will pay towards employee wages – down to a maximum of 22% of someone’s wages from 80% at the start of the Coronavirus Job Retention Scheme “Furlough Scheme.”
Self-Employment Income Support Scheme
The chancellor has extended the self-employed grant scheme. There will now be a third grant receivable by self-employed individuals who have been affected by Coronavirus. Key details:
- The grant will be available to those eligible for the Self-Employment Income Support Scheme Grant.
- The grant will cover three months’ worth of profits for the period from November 2020 to the end of January 2021.
- It will cover 20% of average monthly profits up to a total of £1,875.
A further grant may be made available to the self-employed to cover February 2021 to the end of April 2021. However this will depend on the impact of Coronavirus at this time.
Tourism and hospitality sector VAT cut extension
The 15% emergency VAT cut for the tourism and hospitality industries will be extended for a further two months from January 2021 to 31 March 2021.
Coronavirus Loan payback terms extended
Key details of the chancellors announcements regarding the Coronavirus Loans:
- Bounce Back Loans will be extended from six years to 10.
- Coronavirus Business Interruption Loan Scheme lenders will also be able to extend the length of loans from the current maximum of six years to 10 years.
- The chancellor is also extending the deadline for the government’s coronavirus loan schemes to the end of November 2020.
- Businesses struggling can choose to make interest only payments for six months and those “in real trouble” can apply to suspend repayments altogether for six months.
If you have any questions regarding the governments recent announcements and if any support is available to you or your business as a result of Coronavirus. Please get in touch on 01228 904 904.