Please see our latest blog article for the more recent updates from the chancellor’s statement on November 5th, 2020
The chancellor announced on September 24th 2020 a series of measures as part of the Winter economic plan with the aim to protect jobs and support businesses over the coming winter months. Central to the plan is a new Job Support Scheme, the extension of the Self Employment Income Support Scheme SEISS and more flexibilities for businesses to help pay back loans.
We have outlined what you need to know as a business owner or self-employed and invite you to reach if you need further clarification or support in implementing these measures for yourself and your business.
The new Job support scheme starts November 1st 2020
- The Job support scheme takes the place of the current furlough scheme, due to end October 31
- Employees must be working at least 33% of their usual hours
- The Government will pay a third of hours not worked up to a cap, with the employer also contributing a third. This will ensure employees earn a minimum of 77% of their normal wages, where the Government contribution has not been capped.
- The level of grant will be calculated based on the employee’s usual salary, capped at £697.92 per month.
- Currently confirmed to be available for six months ending 30 April 2021
- Less generous than the current Job Retention Scheme but highly flexible with employees being able to cycle on and off the scheme without the need to keep the same pattern each month. Each short-time working arrangement must cover a minimum period of seven days.
- Can be combined with the Jobs Retention Bonus (£1,000 one-off payment to employers for every furloughed employee who remains continuously employed through to 31 January 2021)
- The scheme applies to all employees, whether they have been previously furloughed or actively working. 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
Here is an example of how the Job support scheme works:
To help you navigate the complexities and calculate how the scheme could best work for your business get in touch via email or phone.
Tax cuts and deferrals for businesses and self-employed
- 15% VAT cut for the tourism and hospitality sectors is extended to the end of March 2021
- If your business has deferred their VAT bills the New Payment Scheme gives you the option to pay back in smaller instalments where rather than paying a lump sum in full at the end March next year, they will be able to make 11 smaller interest-free payments during the 2021-22 financial year.
- 11 million self-assessment taxpayers will be able to benefit from a separate additional 12-month extension from HMRC on 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.
Some good news and not so good news for the self-employed
- The Self Employment Income Support Scheme Grant (SEISS) has been extended to cover three months’ worth of profits for the period from November to the end of January next year.
- However, the grant will cover only 20% of average monthly profits, up to a total of £1,875.
- The taxable grant will be provided to those who are currently eligible for SEISS and are continuing to actively trade but face reduced demand due to coronavirus.
If you have any questions around taxable grants or your next self-assessment tax return due to January 2021 book a call or send us an email
Bounce back loans have been extended
- More than 1.17 million ‘bounce back loans’ have been issued since the scheme launched in May and applications have been extended to the end of November
- Your business can borrow between £2,000 and £50,000 capped at 25% of your total turnover
- No interest will be charged and no repayments will need to be made in the first 12 months and after 12 months, all banks will charge a fixed 2.5% annual interest.
- Bounce back loans may be extended from six years terms to ten, which will cut monthly repayments by nearly half.
- Interest-only periods of up to six months and payment holidays will be available
If you are interested in applying for a Bounce Back Loan from £2,000 – £50,000 or have already taken out a loan and want to verify how these updates affect your cash-flow get in touch to book a financial assessment call.
Kickstart scheme to support employment for young people
- You can create 6-month job placements for young people who are currently on Universal Credit and at risk of long-term unemployment
- And organisation regardless of size can apply for funding. If you have fewer than 30 job placements to offer we can put you in touch with an organisation that can apply on your behalf
- Funding available for each job will cover the relevant National Minimum Wage for 25 hours a week, plus the associated employer National Insurance contributions and employer minimum automatic enrolment contributions.
- The job placements created with Kickstart funding must be new jobs. They must not replace existing or planned vacancies or cause existing employees or contractors to lose or reduce their employment
- The roles you are applying for must be: a minimum of 25 hours per week, for 6 months and paid at least the National Minimum Wage for their age group. Roles should not require people to undertake extensive training before they begin the job placement
- The government will initially prioritise young people aged between 16 and 24 who are ready for an opportunity will be supported by their Jobcentre Plus work coach to enrol in the scheme.
To find out what the Winter Economic Plan means for your business get in touch via email or phone.
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