The Chancellor, Rishi Sunak has outlined the government’s plans to protect jobs as the furlough scheme comes to an end in October.
Job Support Scheme
A new Job Support Scheme will be introduced from the 1st November to protect viable jobs in businesses who are facing lower demand over the winter months as a result of coronavirus. The scheme will run for six months and help keep employees attached to the workforce, the government will contribute towards the wages of employees who are working less than normal hours.
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.
This means employees who can only go back to work on shorter time will still be paid two thirds of the hours for those hours they can’t work.
In order to support only viable jobs, employees must be working at least 33% of their usual hours. The level of grant will be calculated based on employee’s usual salary, capped at £697.92 per month.
The Job Support Scheme will be open to businesses across the UK even if they have not previously used the furlough scheme.
Businesses will still be able to claim the £1,000 job retention bonus for eligible employees next year.
CBILS & BBLS
In his speech the Chancellor also unveiled a new Pay As You Grow scheme, with the Coronavirus Business Interruption Loan Scheme (CBILS) repayment terms been extended for up to ten years.
The Bounce Back Loan Scheme (BBLS) can also be extended from six up to ten years. Companies can also ask to pay interest only payments or suspend payments for six months.
In addition, the government is also extending the deadline to all loan schemes to the 30th November while a successor will be revealed in January 2021.
Self Employment Income Support Scheme Grant (SEISS)
The Government is continuing its support for millions of self-employed individuals by extending the Self Employment Income Support Scheme (SEISS). 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 November to the end of January 2021. This is worth 20% of average monthly profits, up to £1,875.
An additional second grant will be available to cover the period from February 2021 to the end of April 2021.
VAT bills due in March 2021 can now be spread over 11 smaller payments with no interest.
VAT For Hospitality
He also cancelled the planned increase in VAT back to 20% for the hospitality and tourism industry and will keep the lower 5% rate until the 31st March 2021.
More information is due out over the coming weeks, we will let you know as and when we hear more.