New Job Support Scheme and VAT rate cutGeneral News
Chancellor Rishi Sunak has announced a new Job Support Scheme, starting in November 2020. The Job Support Scheme will provide wage support to allow employers to bring their staff back for shorter hours. Employees must work a third of their normal hours and employers will continue to pay the wages of staff for the hours they work. However, they will not need to pay for the hours not worked, the UK Government and the employer will each pay one third of their equivalent salary. All SMEs (small to medium sized enterprises) will be eligible for the new scheme but larger businesses can only apply if they can demonstrate turnover has fallen though the Covid crisis. The scheme will run for six months starting in November and firms can apply to both the Job Support Scheme and claim the job retention bonus.
The Chancellor also announced additional extensions and deferrals:
- Introducing a Pay as you Grow scheme – loans can be extended from six to ten years – halving the average monthly repayment.
- Businesses can choose interest only payments and those in real trouble can apply to suspend payments for up to six months.
- No business taking this up will have their credit rating affected.
Coronavirus Business Interruption Loans
- The Chancellor is extending the government guarantee for up to ten years to make it easier for lenders to give more time to repay.
- Extending deadline of all loan schemes to the end of this year and starting work on a new successor loan guarantee programme to begin in January.
Deferred Tax Bills
- VAT deferrals due in March can now be spread over 11 smaller repayments with no interest to pay.
- For the self-assessed the outstanding tax bill can be spread over 12 months from January.
Hospitality and Tourism
- The VAT rate increase from 5% to 20% planned for 13 January 2021 is being postponed until 31 March 2021.