With Covid-19 restrictions being tightened due to growing cases, the Chancellor of the Exchequer Rishi Sunak has announced a package of measures to help businesses through the uncertain months:
- A new Job Support Scheme will run for six months from 1st November with the aim to protect viable jobs in businesses who are facing lower demand over the winter months. 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.
- As part of the package, the government also announced it will extend the temporary 15% VAT cut for the tourism and hospitality sectors to the end of March next year. This will give businesses in the sector – which has been severely impacted by the pandemic – the confidence to maintain staff as they adapt to a new trading environment.
- Up to half a million business who deferred their VAT bills will be given more ‘breathing space’ through the New Payment Scheme, which gives them the option to pay back in smaller instalments. Rather than paying a lump sum in full at the end March next year, they will be able to make 11 smaller interest-free payments during the 2021-22 financial year.
- Self-assessment taxpayers will be able to benefit from a separate additional 12-month extension from HMRC on the ‘Time to Pay’ self-service facility, meaning payments deferred from July 2020, and those due in January 2021, will now not need to be paid until January 2022.
- Businesses who took out a Bounce Back Loan through a new Pay as You Grow flexible repayment system. Will have more flexibility for firms repaying a Bounce Back Loan. This includes extending the length of the loan from six years to ten
- The government will be extending the Self-Employment Income Support Scheme grant (SEISS), but at just 20% of earnings.
The Chancellor of the Exchequer Rishi Sunak, commented, “The resurgence of the virus, and the measures we need to take in response, pose a threat to our fragile economic recovery.
“Our approach to the next phase of support must be different to that which came before.
“The primary goal of our economic policy remains unchanged – to support people’s jobs – but the way we achieve that must evolve.”
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