UPDATED ON 24 SEPTEMBER AT 13:27
The Chancellor has outlined a Winter Economy Plan to provide certainty to businesses and workers impacted by COVID-19 across the UK.
The following measures have been announced:
The Furlough Scheme will end. A new Job Support Scheme will be introduced from 1 November to protect viable jobs in businesses who are facing lower demand over the winter months due to coronavirus.
Under the scheme, which will run for 6 months and help keep employees attached to the workforce, the government will contribute towards the wages of employees who are working fewer than normal hours due to decreased demand.
Employers will continue to pay the wages of staff for the hours they work – but for the hours not worked, the government and the employer will each pay one third of their equivalent salary.
This means employees who can only go back to work on shorter time will still be paid two thirds of the hours for those hours they can’t work.
In order to support only viable jobs, employees must be working at least 33% of their usual hours. The level of grant will be calculated based on employee’s usual salary, capped at £697.92 per month.
The Job Support Scheme will be open to businesses across the UK even if they have not previously used the furlough scheme, with further guidance being published in due course.
The Government is extending the Self Employment Income Support Scheme Grant (SEISS).
An initial taxable grant will be provided to those who are currently eligible for SEISS and are continuing to actively trade but face reduced demand due to coronavirus. The initial lump sum will cover 3 months’ worth of profits for the period from November to the end of January next year. This is worth 20% of average monthly profits, up to a total of £1,875.
An additional second grant, which may be adjusted to respond to changing circumstances, will be available for self-employed individuals to cover the period from February 2021 to the end of April.
Businesses that have borrowed under the Bounce Back Loan Scheme will be offered the choice of more time and greater flexibility for their repayments.
The length of the loan will be extended from 6 years to 10, which will cut monthly repayments by nearly half. Interest-only periods of up to six months and payment holidays will also be available to businesses.
Coronavirus Business Interruption Loan Scheme lenders can extend the length of loans from a maximum of 6 years to 10 years if it will help businesses to repay the loan.
The Chancellor also announced he would be extending applications for the government’s coronavirus loan schemes until the end of November. More businesses will now be able to benefit from the Coronavirus Business Interruption Loan Scheme, the Coronavirus Large Business Interruption Loan Scheme, the Bounce Back Loan Scheme and the Future Fund.
The Government will also extend the temporary 15% VAT cut for the tourism and hospitality sectors to the end of March next year.
In addition, up to half a million business who deferred their VAT bills will be given more breathing space through the New Payment Scheme, which gives them the option to pay back in smaller instalments. Rather than paying a lump sum in full at the end March next year, they will be able to make 11 smaller interest-free payments during the 2021-22 financial year.
On top of this, around 11 million 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 not need to be paid until January 2022.