Covid-19 - Your Business

Rishi Sunak’s Winter Economy Plan

Autumn Budget

Will be scrapped this year because of the pandemic.

VAT cut extension

The 15% VAT rate cut for the tourism and hospitality industries has been extended until March 31.

VAT deferral

The payments due to 30 June 2020 were originally due to be repaid in one lump sum by 31 March 2021, there is now an opportunity to spread these payments into eleven interest free instalments

Jobs Support Scheme

A new wage subsidy scheme, to encourage struggling firms to keep people on short-term hours, rather than making them redundant.

It’s designed to protect viable jobs over next six months after the furlough scheme ends in October. Employees must work at least third of their hours and be paid for them.

Then, they’ll be paid two-thirds of their pay for the remaining hours (with the employer and the government paying one-third each). So people will still see lower take-home pay. Someone who works 33% of their hours would get 77% of their wages. It will cost the employer 55% of an employees salary.

The Job Support Scheme will be capped at £697.92 per month.

But, this won’t help companies who don’t have enough work to bring staff back part-time (such as in the leisure and hospitality industry).

Notably, all small and medium-sized firms are eligible - but large firms are only eligible if their turnover has fallen in the pandemic.

Clearly this is less generous than the furlough scheme and cynically it will cost employers less to make employees redundant and hire part time or zero rate resource meaning that potentially the job protection that is anticipated is simply not going to be achieved. However, for those viable businesses who absolutely value their employees then this could be the lifeline they need just to see them weather the storm.

Expansion of the Job Support Scheme

Some good news for those businesses severely effected by local lockdown restrictions (and potentially national prevention measures), particularly the hospitality industry... whether it is enough to retain these otherwise fully viable businesses is yet to be seen.

The government on 9 October announced an expansion of the Job Support Scheme (JSS), to provide temporary support to businesses whose premises have been legally required to close as a direct result of coronavirus restrictions.

Under this expansion, affected businesses will receive grants towards the wages of employees who have been instructed to and cease work. This will cover businesses that, as a result of restrictions set by government, are legally required to close their premises, or to provide only delivery and collection services from their premises.

The government will pay two thirds of employees’ wages, up to a maximum of £2,100 per month. Employers will not be required to contribute towards wages, but do need to cover employer National Insurance and pension contributions.

You can apply for the JSS and the new expansion even if you haven’t previously used the Coronavirus Job Retention Scheme (CJRS). JSS is available for six months, from 1 November, with payment of grants in arrears from early December. The scheme will be reviewed in January.

Job Retention Bonus

Further guidance for the Job Retention Bonus is now available. It includes information about how you can check if your employees are eligible and when you can claim the bonus.

You will be able to claim a one-off payment of £1,000 for every eligible employee you furloughed and claimed for through the Coronavirus Job Retention Scheme (CJRS) and kept continuously employed until at least 31 January 2021. Employers do not have to pay this money to their employees.

To be eligible, employees must earn at least £1,560 between 6 November 2020 and 5 February 2021 and have received earnings in the November, December and January tax months. Employees must also not be serving a contractual or statutory notice period on 31 January 2021.

You will be able to claim the bonus from 15 February until 31 March, once you have submitted PAYE information for the period up to 5 February 2021.

Employers can still claim the Job Retention Bonus if they make a claim for the same employees through the Job Support Scheme, as long as they meet the eligibility criteria for both.

A “Pay as you grow scheme” – Bounceback Loans

To help businesses whose trading has been hurt by the pandemic. Small firms can extend their bounceback loans for 10 years, from the previous 6 years, which should halve their monthly repayments, and make interest-only payments if needed.

Coronavirus Loan Schemes

The application deadline for all coronavirus loan schemes has been extended to November 30 (originally 30 September).

Self Employed Support Scheme

The new self-employed grant will cover 20% of average monthly profits, up to a total of £1,875, spanning November to January next year. This continues to be based on the 2019 income as previously based with the same rules and entitlement criteria.

An additional second grant will also be available for self-employed workers to cover February 2021 to the end of April.

The government hasn't said how much this second grant will cover.

12 Month extension for tax bills for the self employed

Self-assessment taxpayers will be able to benefit from a separate additional 12-month extension from HMRC on the “Time to Pay” self-service facility, meaning payments deferred from July 2020, and those due in January 2021, will now not need to be paid until January 2022.

The full details here:

If you want to discuss the support package announced in more detail or have any queries, please get in get in touch with your normal point of contact at Maxwells.

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