Yesterday, the Chancellor Rishi Sunak delivered a speech in parliament outlining the Government’s Winter Economy plan. This will provide a package of additional measures over the coming months to protect jobs and to support businesses across the UK due to the coronavirus.
As a brief overview, the package includes:
A New Jobs Support Scheme
Firstly, the scheme will see the Government contribute towards the wages of employees who are working fewer than normal hours (at least 33% of their usual hours) due to decreased demand caused by the coronavirus. From 1st November, the scheme will last for six months. In order to help protect viable jobs over the winter months.
Employers will continue to pay the wages of staff for the hours they work. For the hours not worked, the government and the employer will each pay one-third of their equivalent salary, capped at £697.92 per month. Businesses will be able to apply even if they haven’t previously used the furlough scheme.
The Jobs Support Scheme will sit alongside the Jobs Retention Bonus. For example, businesses can benefit from both, and could be worth over 60% of average wages of workers who have been furloughed and kept on until the start of February 2021.
Extending the Self Employment Income Support Scheme
Secondly, the Self Employment Income Support Scheme (SEISS) Grant will be extended. Self-employed individuals who are currently eligible for SEISS and are continuing to actively trade. Facing a drop in demand due to the Covid-19 pandemic will receive an initial taxable grant as a lump sum covering three months’ worth of profits for the period from November to the end of January next year.
This is worth 20% of average monthly profits, up to a total of £1,875. An additional second grant, will be available for self-employed individuals. This will cover February 2021 to the end of April.
Tax cuts and deferrals
- The temporary 15% VAT cut for the tourism and hospitality sectors will also end in March next year.
- Business who deferred their VAT bills will be given more breathing space through the New Payment Scheme. Businesses 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. Payments deferred from July 2020, and those due in January 2021, will not need to be paid until January 2022.
Help for businesses in repaying government-backed loans
- Businesses who took out a Bounce-Back Loan will be able to benefit from a new Pay-as-You-Grow flexible repayment system. It will include;
- Extending the length of the loan from 6 to 10 years; cutting monthly repayments by nearly half
- Interest-only periods of up to six months
- Payment holidays will also be available
- Businesses who took out a Coronavirus Business Interruption Loan; the Government are intending to give lenders the ability to extend the length of loans from a maximum of 6 years to 10 years if it will help businesses to repay the loan.
Loan applications extended
The Government are extending the following until the end of November:
- Coronavirus Business Interruption Loan Scheme
- The Coronavirus Large Business Interruption Loan Scheme
- The Bounce Back Loan Scheme
- The Future Fund
Also, for further information, view Rishi Sunaks full speech:
Finally, Thank you for reading ‘Government Winter Economy Plan’. For more Welsh Government updates, click here.