The chancellor unveiled the ‘winter economic plan’ to support workers and businesses as Coronavirus restrictions tighten.
So what do the new measures mean for employees and employers?
The furlough scheme will end on 31st October, to be replaced by the new ‘job support scheme’ that will subsidise employees for part-time work. It will start on 1st November and run for a total of 6 months. During the time the employee is not working, the government will pay them a third of their equivalent wages, and the employer will chip in the other third.
This will be cheaper for the government, however, it will contribute a maximum of 22% of a worker’s wages, capped at £697.92 per month. To receive the support employees must work at least 33% of their usual hours and have been on their employer’s PAYE payroll on or before 23rd September to qualify.
As for business, all small and medium sized businesses are eligible. However, Sunak said the scheme is aimed at those who “need it most”. The scheme is open to businesses that haven’t previously used the furlough scheme, and those that can benefit from both the new scheme and the job retention bonus, under which the government pays £1,000 for each worker brought back from furlough.
If you would like further information on the job protection scheme, get in contact today.
Government eases pressure on small businesses with further loans support
The Government have loosened the terms under which small businesses need to pay back emergency loans. Under the new scheme, dubbed “pay as you grow”, all businesses who have borrowed money through the Bounce Back Loans Scheme (BBLs) and Coronavirus Interruption Loan Scheme (CBILS) will now have 10 years to repay the loans. This is extended from the previous six year deadline, and could cut the average monthly repayment by about 40%
Companies who are in trouble can also change to interest-only repayments for periods of up to 6 months. Alternatively, they can temporarily pause their repayments entirely for up to 6 months, so long as they have made the first 6 payments. If this is something you think your business would benefit from, be sure to talk to your account manager first. Call in on 02085300720 today.
In a move aimed at two of the worst-hit sectors, the hospitality and tourism sectors will now only pay 5% VAT until 31st March 2020. Around 8% of the UK’s workforce – over 2.4m people – rely on hospitality, accommodation and attractions for employment. The government says extending the reduced rate means that over 150,000 businesses will continue to be supported – although it remains to be seen how much it boosts firms and it is up to businesses to decide whether or not they pass on the savings to consumers.
Self employed grant extension
The Chancellor recognises the continued impact that the Coronavirus has had on the self employed and has taken action. The SEISS Grant Extension provides critical support to the self-employed. The grant will be limited to self-employed individuals who are currently eligible for the SEISS and are actively continuing to trade but are facing reduced demand due to COVID-19.
The extension will provide two grants and will last for 6 months from November 2020 to April 2021. Grants will be paid in two lump sum instalments each covering a three-month period. The first grant will cover 3 months’ worth of profits from the start of November until the end of January. It will be worth 20% of average monthly profits and will capped at £1,875 in total.
To be eligible for the scheme, self-employed individuals, including members of partnerships, must meet the following criteria:
• Currently be eligible for the SEISS (although they do not have to have claimed
the previous grants)
• Declare that they are currently actively trading and intend to continue to trade
• Declare that they are impacted by reduced demand due to COVID-19 in the qualifying period. The qualifying period for the first grant is between 1st November and the date of claim
Our goal is to assist as many business owners as possible during this time. Should you require any further assistance or have any questions, we’re more than happy to help. Please contact our expert team today on 02085300720 or email firstname.lastname@example.org