The COVID-19 pandemic has been significantly affecting our economy since its emergence in March. To mitigate the worst damage, the government has been introducing a variety of measures to support, protect and save businesses and workers.
However, with the second wave of the virus approaching and cases rocketing up, there have been further restrictions put into place for the next 6 months. This means that the on-going crisis will continue to impact businesses across the country.
Today (24th September, 2020) the Chancellor Rishi Sunak has outlined a set of new measures – the Winter Economy Plan – to help the businesses during this time. Here’s a summary of what support is available:
Job Support Scheme
The Job Support Scheme (JSS) is designed to give businesses the ability to retain staff working reduced hours, rather than make them redundant. Employees will only be eligible for the scheme if they are working at least 33% of their usual hours.
The employer will be required to pay the employee for the hours worked. For the hours not worked the employer must pay one-third of the equivalent salary, the Government will then pay another third. The Government’s contribution will be reimbursed to the employer in arrears and will be capped at £697.92 per month.
The JSS will be open to all employers, with large employers having to prove that they have been adversely affected (among other criteria, the Government expects that larger employers who are claiming will not issue dividends while using the scheme). The Scheme will run for six months from the 1 November.
SEISS Grant Extension
There will be an extension of the Self-Employed Income Support Scheme (SEISS) which the Government had introduced to support self-employed individuals through the initial lockdown measures. The new grants will only be available to those self-employed who have been previously eligible and who continue to experience reduced demand due to COVID-19.
There will be two grants. The first will be for the period start November 2020 to end January 2021. This grant will be for 20% of average monthly trading profits and will be capped at £1,875. The second grant will be for the period start February 2021 to end April 2021. The value of this grant has not yet been determined by the Government. Information will be provided as it becomes available.
VAT Reduction Extended
The special 5% VAT rate for hospitality and tourism (including supplies of food and non-alcoholic drinks) will continue to apply to 31 March 2021.
Pay as you Grow
Loans taken under the Bounce Back Loan Scheme (BBLS) can now be repaid over a period of ten years. Customers will also be able to pause repayments for a period of up to six-months. This ‘pause’ is available once during the loan’s lifetime and can only be used once at least six payments have been made. The loan can also be moved to an interest-only repayment for a period of up to six-months. Interest-only periods can be applied for up to three times over the course of the loan’s lifetime.
Loan Scheme Extension
The BBLS, Coronavirus Business Interruption Loan Scheme (CBILS), Coronavirus Large Business Interruption Loan Scheme (CLBILS) and Future Fund will remain open until 22 March 2021.
Those businesses which deferred their VAT payment due in March to June 2020, will have the option to spread the payment over the financial year 2021-22.
Self-Assessment – Enhanced Time to Pay
Taxpayers with up to £30,000 in self-assessment tax liabilities due in January 2021 will be able to use HMRC’s self-service Time to Pay facility to secure a plan to pay their liability over 12-months.
Have any questions or concerns?
If you need advice on your financial business health or help applying for any government support schemes, we can help you. We are a team of professional growth accountants in Bournemouth and we specialise in supporting businesses of all sizes. We will review your business situation and together come up with the best plan of actions tailored to your individual needs.
If you think we can help you, don’t hesitate to get in touch with us by calling on 01202 755600 or emailing to firstname.lastname@example.org.