The Chancellor Rishi Sunak announced last week his Covid Winter Rescue Plan which aims to help and support businesses during this difficult time. Here’s our summary of all the key announcements:
Job Support Scheme
With the Job Retention Scheme due to end in October the Government have introduced the new Job Support Scheme as a replacement. This will run from November until 30 April 2021
Any small or medium sized business can make use of the scheme. Larger firms (typically with 250 or more employees) must prove they have been adversely affected before they can claim.
You can include any employees who were on the payroll on 23 September 2020. It is not restricted to employees who were part of the furlough scheme.
To qualify employees must work at least one third of their normal hours.
How it Works?
Employees must work at least 33% of their normal hours which is paid at their normal rate. Of their remaining non-working hours the Government will pay one third of the cost up to a maximum of £697.22 with the employer paying the other two thirds.
John’s contracted working hours are 40 hours per week. He works 28 of those hours and has 12 non-working hours.
His 28 working hours are paid at his normal rate by the employer.
Of the 12 non-working hours the Government will pay one third, so 4 hours. The employer must pay the remaining 8 non-working hours
So the employer will pay in total 28 working hours plus 8 non-working hours.
Bounce Back Loan Scheme
Companies will now be given the chance to extend the length of their loan from 6 to 10 years under the new ‘Pay as You Grow’ scheme allowing them to reduce monthly repayments. There will also be the option of interest only periods of six months and payment holidays.
Coronavirus Business Interruption Loans
These have also been extended to allow companies more flexibility for repayments allowing them to extend the loan period from 6 to 10 years.
The application processes has also been extended and remains open until the end of November.
If your business chose to defer VAT payments until 31st March 2021 you can choose to pay that amount over 11 interest free instalments rather than one payment.
VAT Reduction for Hospitality and Tourism Extended
The temporary reduction of VAT for businesses in hospitality and tourism to 5% has been extended until 31st March 2021.
If you chose to defer your payment on account from 31st July to 31st January 2021 you can make the deferred payment in up to 12 monthly instalments provided your tax bill is under £30,000. To do this you will need to speak to HMRC and arrange a Time to Pay Scheme.
Self-Employment Income Support Scheme is extended
The Self-Employment Income Support Scheme has been extended and two additional grant payments will be made available to those adversely affected over the next 6 months.
An initial grant has been announced which will cover 20% of the businesses average monthly profits for November, December and January up to maximum of £1,875. The details of the second grant are yet to be confirmed.
If you need help or advice with any of these changes
please contact us. We’re here to help your business navigate through these difficult
times and ensure you receive all the support provided.