This week the Chancellor, Rishi Sunak, outlined the government’s Winter Economy Plan which includes additional support for businesses which have been impacted by COVID-19.
The plan includes additional support which aims to help businesses protect jobs over the winter, and an extension to the existing Self-employed Income Support Scheme:
Jobs Support Scheme
When originally announced, the JSS – which will come into effect on 1 November – saw employers paying a third of their employees’ wages for hours not worked, and required employers to be working 33% of their normal hours.
On Thursday 22 October government reduced the employer contribution to those unworked hours to 5%, and reduced the minimum hours requirements to 20%, so those working just one day a week will be eligible. That means that if someone was being paid £587 for their unworked hours, the government would be contributing £543 and their employer £44.
Employers will continue to receive the £1,000 Job Retention Bonus. The Job Support Scheme Closed for businesses legally required to close remains unchanged.
Extension to the Self-Employment Income Support Scheme (SEISS)
The Self-Employment Income Support Scheme (SEISS) provides grants to self-employed people who are continuing to trade but whose business has been adversely affected by COVID-19.
The extension will provide two grants and will last for six months from November 2020 to April 2021. Grants will be paid in two lump sum instalments each covering a three-month period.
The announcement on 22 October increased the amount of profits covered by the two forthcoming self-employed grants from 20 per cent to 40 per cent, meaning the maximum grant will increase from £1,875 to £3,750.
Tax cuts and deferrals
As part of the package, the government also announced it will extend the temporary 15% VAT cut for the tourism and hospitality sectors to the end of March 2021.
The New Payment Scheme will also give businesses the option to pay deferred VAT in smaller instalments.
For those who pay tax via self-assessment, the Time to Pay scheme means that payments deferred from July 2020, and those due in January 2021, will now not need to be paid until January 2022.
Loan payment flexibility
Businesses that have already taken out a Bounce Back Loan will see the term of the loan extended from six to 10 years, with the option of payment holidays and interest-only periods.
Coronavirus Business Interruption Loan Scheme lenders will have the option of extending the period of loans to 10 years where this will help the business to pay back the loan.
Applications for the Coronavirus Business Interruption Loan Scheme, the Coronavirus Large Business Interruption Loan Scheme, the Bounce Back Loan Scheme and the Future Fund will all be extended to the end of November 2020.