Government announces new raft of support for businesses amid second wave of Coronavirus
- 24th September 2020
Chancellor Rishi Sunak has today announced further measures to help support the ‘fragile economic recovery’. The devil will of course be in the detail but the announcement of a 6 month Job Support Scheme, to follow on from the end of the current CRJS will come as a welcome relief to many businesses.
Speaking of the new scheme the Chancellor stated it will help to retain ‘viable jobs’ and help to keep people in work. There will be additional help for the self-employed as part of this scheme.
Job Support Scheme
More details will be released in due course regarding eligibility however what we know so far about the scheme is that an employee must work at least a third of their usual hours to be eligible. The hours worked will be paid in full whilst the Government and the Employer will then cover two thirds of the ‘lost pay’ covering the hours not being worked.
For an eligible employee earning £2,000 a month and working half their hours, they would get £1,000 normal pay plus £333 extra from their employer and £333 from the government.
The employer can also claim the job retention bonus - as long as they qualify for that.
Pay as you Grow
The Chancellor then went on to describe a ‘pay as you grow’ plan with regards to the business Bounce Back Loans, extending the period to pay back these loans from the existing 6 years to 10 years.
There will be an option to move to interest only payments or suspend payments for up to six months for those businesses in “real trouble”.
We are being advised that credit ratings will not be affected.
The government guarantee on Coronavirus Business Interruption Loans will be extended to 10 years and a new successor loan guarantee programme will be announced in January.
Deferral of tax bills
As we have previously alluded to in various articles we have written, many businesses were facing a wall on debt in 2021. Government have listened and responded by announcing the option to spread the deferred VAT debt into 11 smaller payments with no interest. Add to this the ability to extend the tax bill and pay over 12 months with no impact on credit rating.
Tourism and Hospitality
The Chancellors final words were in support of the fragile hospitality and tourism sector. He announced that the VAT rate will remain at 5% until 31 March 2021, extending existing plans which were due to end in January.
Get expert advice
We will be covering all the announcements in more detail and including information on how all of these will work on our Coronavirus Hub over the coming days so to get all the information you need in one central place, please do visit our site.
We are working hard with our clients and businesses to help them be in strong shape to deal with the fluctuations in the economy. We need to play the long game and cashflow and business planning is more important now than ever. If you need help with your business planning and cashflow projections, please do talk to us. Our experts are here to help.
Any news or resources within this section should not be relied upon with regards to figures or data referred to as legislative and policy changes may have occurred.