Coronavirus: Winter Economic Plan

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  2. Coronavirus: Winter Economic Plan
Coronavirus: Winter Economic Plan…

 

Boris Johnson announced new coronavirus restrictions on Tuesday which could last six months. Following this announcement Chancellor Rishi Sunak delivered a statement on Thursday setting out plans to help workers and businesses hit by these new coronavirus restrictions.

 

If you have any concerns, general queries, or specific questions on the below, please get in touch. 

 

Jobs Support Scheme

– Furlough scheme 2 ends on 31 October 2020

– Rishi Sunak today announced that a new Jobs Support Scheme would be introduced in November which will run for six months

– It is open to all small and medium businesses plus some larger businesses if their turnover has fallen during the coronavirus crisis

– Employees are eligible for the Job Support Scheme even if they were not previously furloughed or the employer did not use Furlough Scheme 1 and 2

– Employees must be on an employer’s PAYE payroll on or before 23 September 2020. This means a Real Time Information (RTI) submission notifying payment to that employee to HMRC must have been made on or before 23 September 2020.

– It only applies to staff whose hours have been reduced due to coronavirus but who CAN work at least a third of their normal hours (to be reassessed after three months)

– Employees will be able to cycle on and off the scheme and do not have to be working the same pattern each month, but each short time working arrangement must cover a minimum period of seven days.

– The grant will not cover Employer National Insurance Contributions or pension contributions, the employer will still be expected to pay these

– Employees cannot be made redundant or put on notice of redundancy during the period within which their employer is claiming the grant for that employee.

– Employers pay staff for actual hours worked

– For the hours not available to be worked, one third of this pay will still be required to be paid by the employer, one third will be paid by the government and one third will be ‘lost’.

– The grant element has a cap of £697.92 per month

– HMRC will be checking claims and process – Employers must agree the new short-time working arrangements with their staff, make any changes to the employment contract by agreement, and notify the employee in writing. This agreement must be made available to HMRC on request.

– HMRC have stated that their intention is that employees will be informed by HMRC directly of full details of the claim

Example

For someone normally earning £1,500 a month working 50% hours, they would get £750 normal pay from their employer plus £250 extra from their employer and £250 from the government.

 

Self-employed Support Extension

 – The extension will provide two grants and will last for six months, from November 2020 to April 2021.

 – Grants will be paid in two lump sum instalments each covering a three-month period.

 – The grants will be available to those eligible for the Self Employment Income Support Scheme Grant (though they do not have to have claimed the grant)

 – Individuals must declare that they are currently actively trading and intend to continue to trade and that they are impacted by reduced demand due to COVID-19 in the qualifying period.

 – The qualifying period for the first grant is between 1November and the date of claim

 – The grant will cover 20% of average monthly profits up to a total of £1,875

 – A further grant will be available to the self-employed to cover February 2021 to the end of April

 – Full details on how to make a claim have not yet been released.

 

CBILS and Bounceback Loans

 – Bounce Back Loans will be extended from six years to 10, cutting monthly repayments by nearly half.

 – CBILS lenders will also be able to extend the length of loans up to 10 years

 – The deadline for the coronavirus loan scheme applications was extended to the end of November

 – When repayments begin businesses can choose to make interest only repayments for six months and those in ‘real trouble’ can apply to suspend repayments altogether for six months.

 

Taxes

 – The 15% emergency VAT cut for the tourism and hospitality industries will be extended from January 2021 to 31 March 2021

 – Business who deferred their VAT bills will be able to pay back their taxes in 11 smaller interest-free instalments

 – Self-assessment income taxpayers may be able to defer tax payments to January 2022 under 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.