BREAKING - "THE WINTER PLAN" extends COVID 19 support to UK businesses
BREAKING - The Government's "Winter Plan" has been unveiled by Chancellor Rishi Sunak today, and it offers fresh support for businesses dealing with the ongoing effects of the COVID 19 Pandemic. We have written a broad summary of these new and extended schemes below.
1. Job Support Scheme - In effective this is an extension of the Job Retention Scheme where staff members have been placed on furlough and is a wage subsidy designed to keep staff employed on short term hours rather than making them redundant, with the government paying 2/3 of their wages for the remaining hours not worked (the employer will pay the final 3rd) and capped at £697.92 per month. It will be based on the employees usual salary.
In addition to the is the Job Retention Bonus will still also take place, paying £1000 per employee to businesses who have retained a previously furloughed staff member through until the end of Jan 2021.
2. Extension of terms on bounce back loans - now repayable over ten years rather than six years if needed, cutting the monthly repayments almost in half.
3. Extension of 5% VAT rate in tourism and hospitality until March next year.
4. Extension of Self Employed Scheme Grant (SEISS) which will be for all previously eligible businesses who are continuing to actively trade but suffering reduced demand due to COVID to cover profit from November to January - this will be at a much reduced rate though and designed to cover 20% of average monthly profit up to a maximum total grant of £1,875.
A further grant for self employed to part cover profits is expected to rund for the period Feb 21-end of April 21, however the government will not decide on the level of the grant yet as it will depend upon circumstances within the wider economy nearer the time.
5. 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.
6. 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.
We continue to receive more detailed guidance on these measures and will update effected clients directly as and when more information becomes available. In the meantime head to www.gov.uk/government/news/chancellor-outlines-winter-economy-plan for the direct government release.