The chancellor, Rishi Sunak, announced yesterday his Winter Economy Plan to the House of Commons. The new measures that will be implemented are to support jobs and businesses as stricter COVID19 restrictions come into force. All of these new measures announced are expected to be in place for the next six months.
This scheme will be introduced from 1 November 2020 to support viable UK employers who face a lower demand due to COVID19 and to keep their employees within the workforce. The government are going to directly support the wages of people in work, giving businesses who face depressed winter demand the option of keeping employees in a job on shorter hours rather than making them redundant. Helping to battle the unemployment crisis and also gives employers an incentive to bring back furloughed staff.
This scheme is available to all SMEs and businesses are eligible, even if they did not use the furlough scheme. Larger business may be eligible to apply if their turnover has dropped by over a third.
The government are extending the existing self-employed grant on similar terms and conditions as the new jobs support scheme. This grant is limited to self-employed individuals who are currently eligible for SEISS and are actively continuing to trade but are facing reduced demand due to COVID19.
The planned increase in VAT has been cancelled for businesses in the hospitality and tourism sector. The lower 5% VAT rate is remaining until March 31st next year. This is to help support the cash flow and viability of businesses, as well as protect 2.4 million jobs.
The government is extending four temporary loan schemes to 30 November 2020 for new applications. The four temporary loan schemes are:
Pay as you Grow gives businesses who have borrowed money under the Bounce Back Loan Scheme more time and greater flexibility to repay.
A business that deferred VAT this year to help them survive will no longer have to repay all of this in one lump sum in March 2021.
In addition, they are offering enhanced time to pay for self-assessment taxpayers. The government will give the self-employed and other taxpayers more time to pay taxes that are due in January 2021.
The Winter Economy Plan is available to read in full detail on the government website.
If you have any concerns or would like to discuss any of these new guidelines further, please get in contact with the HPC team today.
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