The Chancellor today announced the Government’s Winter Economy Plan to protect viable jobs in businesses who are facing lower demand over the winter months due to coronavirus.
The measures announced include:
- A new Job Support Scheme, where employees get paid for hours they work (as long as this is over 33% of the time), with the burden of hours not worked being shared equally between the employee, employer and government, a third each way. This supports viable jobs and will open from 1 November, running for six months until the end of April 2021. All businesses will be eligible, with some restrictions in place for larger businesses.
- A further grant for self-employed small businesses who used the existing SEISS scheme. The grant will match the average grant of the Job Support Scheme, and represent 20% of three month earnings, for November to January.
- A new ‘Pay as You Grow’ scheme providing greater flexibility for repaying loans. Borrowers will have the option to extend the terms of Bounce Back Loans to 10 years, and the Government are also extending the deadline for loan applications.
- Extending the 5% VAT rate for the tourism and hospitality sectors until the end of March, in recognition of the significant impact the restrictions have has on these sectors.
- Deferring repayments of VAT to allow businesses who want extra time to pay back the VAT they owe in smaller equal monthly payments, interest-free, until the end of March 2022.
- More time for self-assessment businesses to pay back, also enabling all 11 million self-assessment taxpayers to create a 12-month payment arrangement for up to £30,000 each, and extended under the end of January 2022.
These measures will target support on the immediate needs of businesses, focusing on those most affected by Covid and helping them to retain staff on reduced hours rather than facing redundancies. Further information is available here.
This additional support builds on the unprecedented support the Government has already provided to protect people’s livelihoods and support businesses directly, through a package of loans, business grants, business rates relief and wage support already worth £190 billion.