In The News
24 September 2020 - Chancellor Announcement
The Chancellor has made further announcements to support jobs and business during the COVID crisis.
These plans are set out in the links below.
The most important announcement made concerns the replacement of the Furlough scheme by a new “Job Support Scheme”.
It aims to support jobs based upon on 3 principles:
The government and the employer will cover the other 2/3 of the employee wages representing the pay lost by reducing their working hours.
The support from Government (1/3rd) will be capped at £697.92 per month.
The scheme to run for 6 months starting in November.
Employers retaining furlough staff on shorter hours can claim both the job support and the jobs retention bonus (£1,000 per employee in Jan 2021).
Current self-employment grant being extended on similar conditions as the new job support scheme. Worth 20% of average monthly profits between November and January.
Cash Flow support for Businesses
Borrowers who have bounce back loans are to be given more time to repay loans.
Loan repayments have been extended from 6 years to 10 years, thereby reducing monthly repayments.
Coronavirus business interruption loans.
Government Guarantees have been extended for up to 10 years with Government making further plans to introduce a successor loan guarantee scheme due to begin in January 2021.
Deferred tax bills.
Where VAT payments would be otherwise due in March 2021 under current scheme, businesses are to be allowed to spread bill over 11 payments with no interest.
Self-assessed income tax payers who need extra help can extend their outstanding tax bill over 12 months from next January.
Hospitality and Tourism.
VAT is scheduled to change from 5% to 20% on 13 January 2020 but the announcement means that the lower rate of 5% is to be extended until 31 March 2021.
The changes are welcome because there was sense that the economy and jobs in particular would fall of a very steep cliff on 1 November when existing measures end.
Whether they are enough to solve all of the issues is unlikely – indeed reference to supporting viable jobs probably sets the tone for what might be achieved – but the economy and individuals in particular needs support.
The devil is in the unpublished detail of which we will hear more soon.
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