Further to the Chancellor’s Winter Economy Plan announcement we thought it would be useful to summarise the key points
Job Support Scheme
A new Job Support Scheme (JSS) will run from 1 November 2020 for 6 months until 30 April 2021. The scheme has been introduced to help protect jobs that are still viable despite the downturn due to Covid-19.
To qualify for support under JSS the employee will need to work at least one-third of their normal hours. Due to this being a short-time working arrangement the reduced hours will need to be agreed between the employer and employee.
The Government and the employer will pay one-third of the hours that the employee does not work up to a cap of £697.92 per month.
The table below illustrates the amount of work performed by the employee and the impact this has on the corresponding JSS grant and the contribution by the employer for the hours not worked:
|% of normal pay to be paid to employee||78%||80%||83%||87%||90%|
|JSS Grant from Government||22%||20%||16%||13%||10%|
|% of normal pay covered by the employer||55%||60%||67%||73%||80%|
The grant does not cover the cost of Employer National Insurance or Pension contributions. Initial guidance indicates that the JSS grant will be claimed in arrears.
The JSS will be open to all employers across the UK even if they have not previously applied for the Coronavirus Job Retention Scheme (CJRS) which ends on 31 October 2020. If the company is considered to be a large employer, they will need to demonstrate that they have been adversely impacted by Covid-19.
Eligible employers and employees do not need to have been on the CJRS to apply for grants under the JSS. However, the employee had to be on the payroll on or prior to the 23 September 2020.
The scheme will operate in addition to the Job Retention Bonus and businesses can benefit from both schemes in order to help protect viable jobs.
SEISS to be extended
The Self-Employment Income Support Scheme (SEISS) will now be extended until 30 April 2021 for individuals who are actively continuing trading but are experiencing reduced demand.
The first grant under the extension of the scheme will cover the period from 1 November 2020 until
31 January 2021. It will be a taxable grant to cover 20% of average monthly trading profits, paid out in a single instalment covering three months’ worth of profits, and capped at £1,875 in total.
An additional second grant under the extension, will be available for self-employed individuals to cover the period from 1 February to 30 April 2021. HMRC have stated that they will be reviewing the amounts and eligibility for this second grant and will issue further advice in due course.
Enhanced Time to Pay for Self-Assessment taxpayers
Taxpayers will be given further assistance to pay their taxes due in January 2021, in addition to the Self-Assessment deferral provided in July 2020.
Taxpayers with up to £30,000 of Self-Assessment liabilities due will be able to use HMRC’s online self-service Time to Pay facility to secure a plan to pay over an additional 12 months. This means that Self-Assessment liabilities due in July 2020 will not need to be paid in full until January 2022.
If taxpayers have debts are over £30,000, or they need longer than 12 months to repay their debt in full, they will still be able to use the Time to Pay arrangement by calling HMRC.
Extension of VAT Rate Cut for Tourism and Hospitality
The VAT rate cut to 5% for the tourism and hospitality sectors, which was due to end in January 2021, has now been extended until 31 March 2021.
Extension of Access to Finance Schemes
The Government is extending the deadline for new applications to four temporary loan schemes until
30 November 2020. The four loan schemes available are:
- Bounce Back Loan Scheme (BBLS)
- Coronavirus Business Interruption Loan Scheme (CBILS)
- Coronavirus Large Business Interruption Loan Scheme (CLBILS)
- Future Fund
The Government, as part of a ‘Pay As You Grow’ approach, will give all businesses that have borrowed under the BBLS the option to repay their loan over a period of ten years. There will also be an option to move temporarily to interest-only payments for periods of up to six months, an option which can be used three times. The business could also pause their repayments entirely for up to six months, this is an option that can be used once and only after having made six repayments.
The Government also intends to allow lenders to extend the terms of CBILS loans up to ten years.