The Winter Economy Plan
Having recently confirmed that this year’s Autumn Budget was cancelled, Chancellor Rishi Sunak then went on to unveil his Winter Economy Plan, which included an extension to the Self Employment Income Support Scheme, as well as additional government support to businesses and workers impacted by Covid-19.
The Chancellor said: “The resurgence of the virus, and the measures we need to take in response, pose a threat to our fragile economic recovery. Our approach to the next phase of support must be different to that which came before. The primary goal of our economic policy remains unchanged – to support people’s jobs – but the way we achieve that must evolve.”
The measures announced include:-
The Government will extend the temporary 15% VAT cut for the tourism and hospitality sectors to 31st March 2021.
In addition, businesses which deferred their VAT bills earlier in the year can now benefit from the New Payment Scheme, which will give them the option to pay back in 11 monthly interest-free instalments during the 2021-2022 financial year.
Self-Assessment taxpayers who had deferred income tax payments from July 2020 and those due in January 2021, will now not need to be pay until January 2022. Full details are yet to be announced as to how this will be administered.
An extension to the SEISS
Having previously announced that the second Self Employment Income Support Scheme (SEISS) would be the final one, the Chancellor announced that the Government is to extend the SEISS.
An initial taxable grant will be provided to those who are currently eligible for SEISS and are continuing to actively trade but face reduced demand due to coronavirus. The initial lump sum will cover three months’ worth of profits for the period from 1 November to the 31 January 2021. This is worth 20% of average monthly profits, to a total of £1,875.
An additional second grant, which may be adjusted to respond to changing circumstances, will be available for self-employed individuals to cover the period from 1 February to 30 April 2021.
Support for workers
Having previously announced that the furlough scheme would come to an end on 31 October this year, the Chancellor unveiled a new Job Support Scheme is to be introduced from 1 November to protect jobs in businesses who are facing lower demand over the winter months due to coronavirus.
Under the scheme, which will run for six months and help keep employees attached to the workforce, the Government will contribute towards the wages of employees who are working fewer than normal hours due to decreased demand.¬¬¬
Employers will continue to pay the wages of staff for the hours they work – but for the hours not worked, the government and the employer will each pay one third of their equivalent salary. In order to support only viable jobs, employees must be working at least 33% of their usual hours. The level of grant will be calculated based on employee’s usual salary, capped at £697.92 per employee per month.
The Job Support Scheme will be open to businesses across the UK, even if they have not previously used the furlough scheme and further details are anticipated in due course.
It was announced that businesses which took out a Bounce Back Loan or the Coronavirus Business Interruption Loan Scheme will have the length of the loan extended from six years to ten and interest-only periods of up to six months and payment holidays will also be available to businesses.
The Chancellor also announced he would be extending applications for the Government’s coronavirus loan schemes until the end of November.
If you’ve got any questions at all, then please do contact us on 01892 513515 or email@example.com