Following the Chancellor’s announcements today, here is a summary of the main points of the ‘winter plan’:
For employers – Job Support Scheme replaces the Furlough Scheme
Starting on 1st November, the job support scheme will run for 6 months. An employee must work for at least 33% of their normal hours and for the remaining hours not worked, the government and employer pay 1/3rd of the wages each. For example, if an employee earns £1,000 per month and works 50% of their normal hours, the employee would be paid £500 wages and this would be topped up with an additional £167 paid by the government and £167 paid by the employer. Although not confirmed, we expect the employer will have to pay the national insurance and pension on the whole amount the employee is paid and the employee will continue to accrue holiday at their normal rate.
For the self employed – Self Employment Income Support Support Scheme (SEISS)
This has been extended by a further 6 months with another 2 taxable payments to be made payments each covering 3 months, They will be paid in the same way as before and the first payment provides 20% of average monthly trading profits capped at £1,875 with the amount of the second grant to be confirmed. If you received the last SEISS payment you will be eligible for the next one. The dates of the next payments have not yet been announced.
For Vat registered businesses – VAT changes
The VAT rate of 5% for the hospitality and tourism sector has been extended to 31 March 2021.
For the VAT payment that was deferred until March 2021, rather than paying in full by 31st March, you will be able to pay over 11 payments during the 2021-22 financial year. If you wish to take advantage of this you will need to apply; we don’t have the details of how to do this yet.
For all – Self Assessment Tax Bills
Payments deferred from July 2020 and those due January 2021 will now not need to be paid until January 2022. If you wish to take advantage of this you will need to apply; we don’t have the details of how to do this yet.
For all who have taken a Bounceback loan or CBILS – CBILS AND BOUNCEBACK LOANS
Small firms can extend their bounceback loan repayments from 6 years to 10 years, which will reduce the monthly repayments. There will also be the option of interest only periods and payment holidays. The CBILS repayment periods will also be extended from six to a maximum of ten years.
If you have any questions about this, or any other help available, please get in touch