As we rolled towards Autumn it became clear that the UK faced an extended battle against the COVID 19 pandemic. In order to further support the economy the Chancellor announced a Winter Economy Plan on 24 September. Here we cover the key updates and how to access the support on offer.
Job Support Scheme
On 31 October 2020 the Job Retention Scheme (or furloughed worker scheme) will end. Rather than extend the scheme the Government has introduced the Job Support Scheme which will run from 1 November 2020 to 30 April 2021.
The scheme is designed to support jobs that are viable long-term but may see a reduced demand through the winter months as restrictions continue. The idea being that employers cover the costs of hours worked but the costs of hours not worked is shared with the Government.
The key criteria are:
- the company must have an existing PAYE scheme.
- employees must be on payroll before 23 September 2020.
- employees must work a minimum of 33% of their usual hours (this may increase after 3 months of the scheme).
- employers must top up 33% of unworked hours to receive funding of up to 33% from the Government.
- the Government contribution is capped to £697.92 per month.
- the employee must not be on notice of redundancy.
Employers who had previously not used the Job Retention Scheme will be able to use this new scheme, which is welcome news for businesses who may have only recently felt the effects of the pandemic.
For employers who did use the previous scheme, use of this scheme will not prevent receipt of the Job Retention Bonus as long as the employees still meet the criteria of being paid at least £520 per month from 1 November 2020 to 31 January 2021.
VAT Payment Scheme
Earlier this year, VAT Registered businesses were given the opportunity to defer payment of VAT until 31 March 2021. Now additional support has been added to allow payment of this balance over the 2021/22 financial year.
Businesses will need to opt-in to the scheme which will allow payment via 11 monthly instalments. More details on how to do this are expected in the coming months.
Extension to Self-Employed Income Support
The Self-Employed Income Support Scheme is being extended to provide up to two further payments. The first covering November to December, the second February to April.
The first grant will, this time, be equal to up to 20% of trading profits, capped at £1,875 in total. The second grant may follow the same criteria but will be reviewed by the Government nearer the time and potentially adjusted.
Self-Employed Time to Pay
Earlier this year the Self-Employed who had a payment on account due on 31 July 2020 were able to defer this until 31 January 2021 without application. The scheme has been extended to allow this amount to be deferred by up to 12 months further, along with deferral of the amounts usually due on 31 January 2021 (i.e. the 2020 tax liability and first payment on account for 2021).
Application will be made by the HMRC Time to Pay self-service facility and will mean all three payments will not need to be made until January 2022.
To qualify the self-assessed liability must be below £30,000. If you fall above this threshold or are unable to use the self-service facility, you can continue to use the Time to Pay helpline to discuss a plan with HMRC.
Pay as you Grow – Bounce Back Loan Scheme (BBLS)
Businesses who have taken out a Bounce Back Loan will be able to take advantage of new flexible payment terms. This includes:
- extending the term of the loan from 6 to 10 years;
- interest only periods of up to 6 months; and
- payment holidays of up to 6 months.
Loan Scheme Deadline Extension
Previously extended to 30 September, the Winter Economy Plan includes further extensions for applications for the Coronavirus Business Interruption Loan Scheme (CBILS) and BBLS. The deadline for the submission of applications is now 30 November 2020.
Need More Help?
As with previous schemes, we’re waiting on further details on some of the Winter Economy Plan as well as access to application portals. We’ll update our website as these are available. If you need more help understanding what’s applicable to you or more generally in navigating the current situation, please do get in touch!