The government has outlined its additional support package for businesses and workers adversely affected by coronavirus.
Here is an overview of some of the key measures, including a new Job Support Scheme and extension of the Self Employment Income Support Scheme.
Job Support Scheme
This new scheme will be introduced from 1 November, protecting those businesses that are facing lower demand over the winter months due to coronavirus.
The Job Support Scheme has been designed to work with the Job Retention Bonus and could be worth 60% of the average wage of employees that have been furloughed if they are employed until the start of February 2021.
As part of this scheme, the government will contribute towards the wages of those employees that are working less hours than they normally would as a result of decreased demand within the business.
How does the scheme work?
- The scheme will run for six months;
- Employers will continue to pay employees for the hours they work;
- For the hours not worked, the government and employer will each pay one third of their equivalent salary;
- To qualify for the scheme, employees must be working at least 33% of their usual hours; and
- The level of the grant will be calculated based on the employee’s usual salary, capped at £697.92 per month.
Who is eligible?
- The scheme is open to businesses across the UK;
- Employers do not need to have previously used the furlough scheme to be eligible; and
- Employers can use the Job Retention Bonus along-side this scheme.
Self-Employment Income Support Scheme Grant (SEISS)
The Self-Employment Income Support Scheme Grant is being extended for those individuals that are continuing to actively trade but are still facing reduced demand due to coronavirus.
Will the grant still work in the same way?
- The initial lump sum will cover three months’ worth of profits for the period November to the end of January 2021; and
- The grant will be worth 20% of average monthly profits, up to a total of £1,875.
An additional SEISS grant may also be available to cover the period from February 2021 to the end of April 2021, although this may be adjusted to respond to changing circumstances.
VAT cut for tourism and hospitality
The temporary 15% VAT cut for the tourism and hospitality sector will be extended to the end of March 2021.
New Payment Scheme
The New Payment Scheme will also enable those businesses that deferred their VAT bills the option to pay back in smaller instalments.
Instead of making a single payment in full at the end of March 2021, they will be able to make 11 smaller, interest-free payments during the 2021-22 financial year.
Time to Pay
Self-assessment taxpayers will also benefit from a 12-month extension from HMRC on the ‘Time to Pay’ self-service facility. This means that those payments that were deferred from July 2020, and those due in January 2021, will now not need to be paid until January 2022.
Flexibility on Loan Payments
Bounce Back Loan
A ‘Pay as You Grow’ repayment system is being introduced, providing more flexibility with repayments for those businesses that took out a Bounce Back Loan.
- Extending the length of the loan from six to ten years, cutting monthly repayments by nearly half; and
- Interest-only periods of up to six months and payment holidays will be available.
Coronavirus Business Interruption Loan Scheme
- The ability to extend the length of the loan from a maximum of six years to ten, to help businesses with repayments.
Extension of loan application deadlines
Applications for the government’s coronavirus loan schemes will be extended until the end of November.
This aligns the application deadline for the Coronavirus Business Interruption Loan Scheme, the Coronavirus Large Business Interruption Loan Scheme, the Bounce Back Loan Scheme and the Future Fund.
Should you have any queries on the above or require any help or support during these challenging times then please either get in touch with your usual M+A Partners contact or email email@example.com and we will be happy to help.