Chancellor announces further support for business
25 September 2020
Chancellor Rishi Sunak announced a raft of further government plans to support jobs and businesses over the coming months, as part of a Winter Economy Plan.
Significantly, a new Job Support Scheme (JSS) will be introduced from 1 November, replacing the current furlough Scheme. The JSS Scheme will run for six months (up to April 2021) and the level of grant available will be capped at £697.92 per month. Claims (in arrears of wages paid) can be made online from December.
All Small and Medium-Sized Enterprises (SMEs) will be eligible, and large businesses will be required to demonstrate that the business has been adversely affected by COVID-19.
Fuller details behind the new Job Support Scheme are shown in a government factsheet. This includes a simple illustrative example for an employee on reduced hours.
The JSS is designed to sit alongside the Jobs Retention Bonus (see the ‘Employment and Skills’ section of the ECA Business Recovery page) and businesses may seek to access both schemes.
Deferred VAT payment
The Chancellor also announced that businesses that have deferred payment of VAT bills may access a New Payment Scheme that gives them the option to pay in smaller instalments. Rather than paying a full lump sum at the end March 2021, they will be able to make 11 smaller (interest-free) payments during the 2021-22 financial year. HMRC will provide an opt-in process “in early 2021”.
Greater loan flexibility
Repayment will also be eased for businesses who took out a ‘Bounce Back’ Loan through access to a new ‘Pay as You Grow’ flexible repayment system. This includes extending the length of the loan from six years to ten. Interest-only periods of up to six months and ‘payment holidays’ were also announced.
The Government also aims to give Coronavirus Business Interruption Loan Scheme (CBILS) lenders the ability to extend the length of loans from a maximum of six years to ten years, where this will help businesses to repay their loan.
The Chancellor also extended the timeline for businesses making new applications for coronavirus loan schemes, to the end of November. This includes the: Coronavirus Business Interruption Loan Scheme; Coronavirus Large Business Interruption Loan Scheme; Bounce Back Loan Scheme; and the Future Fund. This change aligns all the end dates for these Schemes. See the ‘Commercial’ section of the ECA Business Recovery webpage for details of the government loan schemes.
Support for the Self-Employed
The Government is also extending the Self-Employment Income Support Scheme Grant (SEISS). An initial (taxable) grant will be available to those currently eligible for SEISS and who are continuing to actively trade but face reduced demand due to coronavirus. An initial lump sum will cover three months’ profits from November to the end of January 2021 (20% of average monthly profits, up to a total of £1,875).
An additional grant, which may be adjusted to respond to changing circumstances will also be made available to the self-employed, to cover February 2021 to the end of April.
In addition, self-assessment taxpayers may also benefit from a 12-month HMRC extension on the ‘Time to Pay’ self-service facility. This means payments deferred from July 2020, and those due in January 2021, will not need to be paid in full until January 2022.
The background to the Government’s Winter Economy Plan is accessible here.