Read a round-up of the latest government measures available to support businesses and to protect jobs.
On 24th September Chancellor Rishi Sunak unveiled a number of supportive measures to help protect jobs and support the economy through what will certainly be a difficult next six months for most.
He also announced that the Autumn Budget will no longer go ahead as planned and instead we can expect a Spring Budget, which he is legally obliged to deliver before the end of the tax year. This was anticipated as it would have been difficult for the Chancellor to map out a way forward, which inevitably will detail how the country will begin to pay for these emergency unprecedented measures, whilst we are still struggling through the pandemic.
A new Job Support Scheme (JSS)
From 1st November 2020, the government will top up wages for 6 months for those employees working shorter hours than their ‘normal hours’ for businesses facing lower demand due to COVID-19. Employees must work at least 33% of their usual hours. For every hour not worked:
- The government will cover 33% of employee’s usual pay (capped at £697.92 pm)
- Employer must cover at least 33% of employee’s usual pay
- Employee must not be on a redundancy notice
- Employer will be re-imbursed in arrears
- Employer must have a UK PAYE scheme and UK bank account
- All small and medium enterprises will be eligible
- Larger businesses can claim if can demonstrate adversely being affected by COVID-19. The government expects large employers not to make distributions while using the scheme
- Employers can still claim the Job Retention Scheme bonus in 2021, even if claiming under the Job Support Scheme
An extension to Self-Employed Income Support Scheme (SEISS)
The Self-Employed Income Support Scheme has been extended for 6 months to April 2021. The grant is available to self-employed who are;
- Already eligible under SEISS
- Actively continuing to trade
- Facing reduced demand due to COVID-19
The first grant for November to the end of January will cover 20% of average monthly trading profits and is capped at £1,875 in total. The second grant will cover February to the end of April. The grant level will be set in due course.
Help with cashflow
The government are extending the cut-off date for new applications to 30 November 2020 for the all finance schemes previously announced and are providing greater flexibility on repayments for two schemes.
Bounce Back Loan Scheme (BBLS)
Pay as you Grow has been introduced, providing borrowers with the following extra options;
- To repay loan over a period of up to 10 years
- To temporarily make interest-only repayments for up to 6 months (this option can be used up to 3 times during the loan)
- To pause payments entirely for up to 6 months (this option can be used once, and only after made initial 6 repayments)
The existing details remain the same for the loans;
- Loans are between £2,000 and £50,000
- Loans are capped at 25% of turnover
- The government will cover interest for the first 12 months
- No repayments necessary for the first 12 months
- 100% guaranteed by government for lender.
Coronavirus Business Interruption Loan Scheme (CBILS)
The government will allow lenders to extend term of loan repayments up to 10 years. The existing details remain the same for the loans;
- Loans up to £5 million with an 80% government guarantee to lender
- Government will cover interest for the first 12 months
VAT deferral ‘New Payment Scheme’
Any VAT payments due during the period March to June 2020 and were deferred were originally due for repayment by 31st March 2021.
- This deferred VAT can now be repaid, interest free, over 11 equal instalments from April 2021
- Businesses will need to opt in
- All businesses with deferred VAT are eligible.
- Further details and process will be available in early 2021
Enhanced time to Pay for Self-Assessment taxpayers
The government are giving self-assessment taxpayers more time to pay their coming tax liabilities.
- Taxpayers with bills up to £30,000 (normally £10,000) will be able to use HMRC’s self-service Time to Pay facility to secure a 12-month payment plan.
- This covers any tax due January 2021, and any tax deferred from July 2020.
- Any self-assessment taxpayer unable to pay their tax bills on time and unable to use the above can contact HMRC’s Time to Pay Self-Assessment helpline 0300 200 3822.
Hospitality and Tourism
The temporary VAT reduced rate is being extended. This means that the 5% VAT rate will now remain in place for hospitality and tourism until 31st March 2021. It will continue to apply to supplies of food and non-alcoholic drinks from restaurants, pubs, bars, cafes and similar premises, supplies of accommodation and admission to attractions across the UK.
If you have any questions about accessing the latest support measures, please do get in contact with the team at DRG Chartered Accountants. We would be delighted to hear from you.
For further information
Gov.uk website: Winter Economy Plan
Gov.uk website: Job Support Scheme Fact Sheet
Gov.uk website: Check if you can claim a grant through the Self-Employment Income Support Scheme
DISCLAIMER: This information is for guidance only, and professional advice should be obtained before acting on any information contained herein. We will not accept any responsibility for loss to any person as a result of action taken or refrained from in consequence of the contents of this publication.
