Key Points from Rishi Sunak's Winter Economy Plan
Furlough scheme replacement - The Job Support Scheme will begin in November and run for six months
A new “Jobs Support Scheme” to subsidise the wages of people in work to replace the furlough scheme when it ends at the end of October.
Businesses will have the option of keeping employees in a job on shorter hours, rather than making them redundant.
Workers must work a third of their usual hours, paid by their employer as normal.
For the time they are not working, the government will pay a third of their usual pay, and the employer will pay a third of their usual pay.
Including the pay, for the hours they are working. the Treasury says this means workers will get 77% of their usual pay. This means an employee working 33 percent of their normal hours will get 77 percent of their normal wages
For the remaining hours not worked, the Government and the employer will pay a third of those wages each
The scheme will be targeted at businesses that need it most – all small and medium-sized firms – but only for big companies if turnover has fallen by a third.
Firms can claim both the jobs support scheme and the jobs retention bonus.
Business loans - "pay as you grow" extension to the Bounce Back Loan scheme will give businesses 10 years to repay them
Loans can be extended from six to 10 years, almost halving repayments. Interest-only payments can be made, and firms in “real trouble” can suspend their pay-outs for 6 months.
The application deadline for all coronavirus loan schemes – including the Future Fund - has been extended to 30 November.
The government is starting work on a new guarantee loan programme to begin in January.
Business who deferred their March 2020 quarter VAT bills will be given more breathing space through the new payment scheme, which gives them the option to pay back in smaller instalments. Rather than paying a lump sum in full at the end of March next year, they will be able to make 11 smaller interest- free payments during the 2021-22 financial year.
Hospitality sector - VAT cut to 5% for hospitality and tourism extended until the end of March.
Sunak says on current plans VAT will increase from 5% to 20% on 13 January 2021.
The cut had been made at the chancellor’s summer economic update.
The chancellor says he is cancelling a planned increase in VAT, keeping a lower rate of VAT for hospitality and leisure firms until 31 March 2021.
Around 11m self-assessment taxpayers will be able to benefit from a separate additional 12-month extension from HMRC on the time to pay self-service facility, meaning payments deferred from July 2020, and those due in January 2021, will now not need to be paid until January 2022.
Self-Employment Support Scheme extended
The Chancellor also announced that the self-employment income support scheme (SEISS) will be extended to support viable traders who are facing reduced demand over the winter months, covering 20% of average monthly trading profits via a government grant