Government Announces Additional Support for Businesses
The Chancellor has announced additional support for businesses and the self-employed.
The new package includes a Jobs Support Scheme to protect millions of workers and extending the Self Employment Income Support Scheme. Furthermore the 15% VAT cut for the hospitality & tourism sectors will be extended along with help for businesses in repaying government-backed loans.
In summary, the changes announced are as follows:
Jobs Support Scheme
From 1 November 2020, the Jobs Support Scheme will run for six months. Staff must be working at least 33% of hours to qualify for the support.
How it works - Employers will continue to pay the wages of staff for the hours they work - but for the hours not worked, the government and the employer will each pay one third of their equivalent salary.
Self Employment Income Support Scheme
The Government will continue the Self Employment Income Support Scheme.
How it works - An initial taxable grant will be provided to those who are currently eligible for SEISS and are continuing to actively trade but face reduced demand due to coronavirus. The initial lump sum will cover three months' worth of profits for the period from November to the end of January next year. This is worth 20% of average monthly profits, up to a total of £1,875.
This will continue from February to April unless there are any significant changes.
The Government announced it will extend the temporary 15% VAT cut for the tourism and hospitality sectors to the end of March next year.
For those businesses that have deferred VAT payments, the Government has given them the option to pay back in instalments. Rather than a lump sum payment in March, they can now pay 11 smaller interest free payments.
Self assessment taxpayers will be able to benefit from a separate extension to the 'Time To Pay' Scheme.
The Government announced that those that took out 'Bounce Back Loans' will now be able to pay back over ten years rather than six. There will also be the option to have interest-only periods of up to six months and payment holidays.
For those that accessed the Coronavirus Business Interruption Loan Scheme, lenders will be able to extend the length of loans from a maximum of six years to ten years, if it will help businesses to repay the loan.
The Government will be publishing further guidance on all the changes announced today very shortly.
With regards to the loan schemes, this may take lenders some time to change their processes and documents but we should know more soon.
As always if you have any questions or concerns please do not hesitate to get in touch