New Support to Protect Jobs and Businesses
Central Government have today announced a package of new measures to protect jobs and support businesses.
The package includes a new Job Support Scheme, extending the Self Employment Income Support Scheme and 15% VAT cut for the hospitality and tourism sectors and help for businesses in repaying government-backed loans .
Job Support Scheme
The Job Support Scheme will be introduced from 1 November, to replace the current Job Retention Scheme and is designed to protect viable jobs in businesses who are facing lower demand over the winter months due to coronavirus.
Under the scheme, which will run for six months, the government will contribute towards the wages of employees who are working fewer than normal hours dur 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.
This means employees who can only go back to work on shorter time will still be paid two thirds of the hours for those hours they can’t work.
Businesses can benefit from both the Job Support Scheme and Job Retention Bonus.
Support for the Self Employment
In addition, the Government is continuing its support for millions of self-employed individuals by extending the Self Employment Income Support Scheme Grant (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 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, which may be adjusted to respond to changing circumstances, will be available for self-employed individuals to cover the period from February 2021 to the end of April – ensuring our support continues right through to next year.
Flexible loan payments, tax cuts and deferrals
The Government have confirmed their plans to increase flexibility for firms repaying a Bounce Back Loan.
This includes extending the length of the loan from six years to ten, which will cut monthly repayments by nearly half. Interest-only periods of up to six months and payment holidays will also be available to businesses.
The Government are also giving Coronavirus Business Interruption Loan Scheme lenders the ability to extend the length of loans from a maximum of six years to ten years if it will help businesses to repay the loan.
Tax cuts and deferrals
As part of the package, the government will extend the temporary 15% VAT cut for the tourism and hospitality sectors to the end of March next year.
Business who deferred their VAT bills will be given more breathing space through the New Payment Scheme which gives them the option to pay back in small instalments. Rather than paying a lump sum in full at the end March next year, they 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, meaning payments deferred July 2020, and those due in January 2021, will not need to be paid until January 2022.