Chancellors recent announcement
This afternoon the Chancellor outlined his Winter Economy Plan, where a series of measures to help jobs and businesses were announced. Below you will find an overview of what you need to be aware of going forward.
Support for Employees
A new Job Support scheme will be introduced on 1st November – This scheme will last for 6 months
- Employees must be working 33% of their usual hours
- Employers must also pay one third of the hours not worked
- The government will contribute one third of the hours not worked
- The employee will therefore receive up 77% of their normal pay
- Similar caps exist as per the current furlough scheme
- Large firms will have to justify that they are suffering before they can claim under the new scheme
- Employees cannot be made redundant whilst on the scheme
Support for the Self Employed
A similar scheme will be introduced for the self employed
- A grant will be paid of 20% of average monthly profits up to a maximum of £1,875
- The next grant is payable for the November 2020 to January 2021 period
- A further grant will be payable for the February to April 2021 period
- Additional time to pay will be available for self-assessment tax payable on 31st January 2021, including deferred payments from 31st July 2020
- The temporary reduction in VAT for the hospitality and tourist industry will be extended to 31st March 2020 (was 31st December 2020)
- VAT deferred from spring 2020 and due for payment on 31st March 2021, can now be paid over 11 monthly payments – interest free
- The repayment period for CBILS and Bounce Back loans has been extended from 6 years to ten years
- Additionally, a repayment holiday of up to 6 months will be possible with payments interest only during that period
- A new loan scheme is expected in the new year
To find out more, please visit the GOV.UK website
All of the above is subject to confirmation within the details which will be released in due course but is our current understanding of today’s announcement.
Whilst all support is welcome, initial thoughts are that businesses will struggle to retain employees unless they have the sales to support the higher wages payments. Decisions on redundancies will therefore continue to be critical to reduce costs where necessary to levels sustainable by businesses.
Please let us know if you have any questions regarding any of the points above.
Phone: 023 8000 1313