Winter Economic Plan
On Thursday 24 September, the Chancellor of the Exchequer Rishi Sunak announced new financial measures to support jobs and the economy throughout the next 6 months.
The announcement comes just two days after the government re-imposed a series of tighter restrictions to curb the spread of COVID-19 in the UK.
The Chancellor said: "Our approach to the next phase of support must be different to that which came before. The primary goal of our economic policy remains unchanged - to support people's jobs - but the way we achieve that must evolve."
The key points include:
- A new Jobs Support Scheme will replace the CJR Scheme when it ends in November. To be eligible employees must be working at least 33% of their usual hours. For the hours employees can't work, the government and the employer will each cover one third of the lost pay. Employees will therefore receive their normal pay for the hours they do work and two thirds of normal pay for hours they don't work.
- The previously announced VAT cut to 5% for the hospitality and tourism sector will be extended until 31 March.
- A "pay as you grow" scheme will allow businesses to extend their bounce back loans from six to ten years.
- An extension in applications for the government's coronavirus loan schemes until the end of November.
- The government guarantee on CBILS will be extended to 10 years and a new loan guarantee programme will be announced in January.
- The self-employed grant will be extended on the same basis as the job support scheme. It will cover 20% of average monthly profits (up to £1,875) for the period from November 2020 to the end of January 2021. An additional second grant, which may be adjusted to respond to changing circumstances, will cover February 2021 to the end of April 2021.
- Companies that deferred their VAT bill will no longer have to pay a lump sum in March. They can instead make 11 smaller interest-free payments during the 2021-22 financial year.
- An additional 12-month extension from HMRC on the "Time to Pay" self-service facility, means payments deferred from July 2020, and those due in January 2021, will now not need to be paid until January 2022.
The Government will release more detail on all the above over the coming days and weeks. In the meantime, if you would like more detailed one-to-one advice on any of the issues raised in the update, please get in touch or give us a call on 01903 234094.