The Chancellor’s Winter Economy Plan

Yesterday the Chancellor Rishi Sunak unveiled his winter economy plan. The key announcements of the winter economy plan were as follows:

New Job Support Scheme

A new job support scheme will be introduced when the furlough scheme ends on 1 November.  The scheme will run for six months & will be aimed at small & medium sized businesses.  Larger businesses will only qualify if their turnover has fallen due to the pandemic.  Under the scheme employers will continue to pay their staff’s wages for the hours they work, but for the hours not worked the Government & the employer will each pay 1/3 of their equivalent salary.  Employees must be working at least 33% of their usual hours.  The grant will be a cap of £697.92 per month & employers  must pay the associated employer pension contributions & National Insurance.  The calculation of “usual hours” is likely to be complicated & we would urge employers to check the guidance carefully to ensure employees are working enough hours to qualify.   This scheme is in addition to the Job Retention Bonus that has already been announced & employers will be able to benefit from both schemes if the qualifying criteria are met.

Self Employment Income Support Scheme

The Self Employment Income Support Scheme will be extended, with two additional grants being made available to qualifying self-employed individuals.

VAT Cut Extension

The temporary VAT cut for the hospitality & tourism sectors will be extended to 31 March 2021.

Deferred VAT Liabilities

Businesses who chose to defer their VAT bills between 20 March & 30 June will have more time to pay their deferred liabilities.  Instead of paying a lump sum in March 2020, they will be able to make 11 interest free payments during the 2021/22 financial year.

Self Assessment Payment Deadline Extension

Self Assessment tax payers will also benefit from a further extension, meaning payments originally due in July 2020, & payments due in January 2021, can be deferred until January 2022.

Businesses Loans

Businesses who have taken out Bounce Back loans or Business Interruption Loans will have longer to repay these.