Winter Economy Plan – Business Help

Mr Sunak has made some initial announcements about the support available for businesses going forward.  No doubt we will get more details soon, but here are some highlights:

  1. The Job Retention Scheme (Furlough) will end on 31st October.  The Job Support Scheme will offer grants of up to £698 per person per month for reduced hours working.  If an employee works 33% of usual hours then if the employer pays one third of the “missing” hours, the government will match it.  So a £2,000 a month employee working 50% hours would be paid £1000 salary plus £333 employer funding and £333 Government funding for the lost hours.  The missing hours are basically “split three ways”.  The scheme will no doubt put pressure on payroll bureau providers if it is popular (another new scheme!) and is in place for six months.  We will provide more details once they are published and work through the opportunity this offers with those clients who are interested in using it.
  2. VAT deferrals – where people deferred their Spring 2020 VAT until 31st March 2021, they will be able to arrange to spread that liability.
  3. Self Assessment – some taxpayers who are self employed were able to leave their July 2020 payment on account aside for January.  A further deferral of that payment, and the January 2021 to January 2022 may be possible for some taxpayers (more to follow).
  4. The Self Employed Income Support Grant Scheme will be extended again for those already eligible with a further grant of up to £1875 covering November to January coming with a further grant thereafter (being reviewed on circumstances) .
  5. The 5% VAT cut (to 15%) for hospitality businesses will be extended to last until 31st March 2021.
  6. The terms of repayment for Bounce Back and CBILS loans are being changed to allow ten year repayments and repayment holidays where needed.  The schemes application deadlines are being extended until the end of November.

We can’t help but observe that for those businesses that are closed, or all but closed, no measures alone seem guaranteed to see them through to the summer of 2021 when, perhaps, a vaccine or immunity, will mean life creeps back to a more normal situation.  However, a cautious welcome is surely in order.

Please contact your usual Milne Craig contact or email if you have any questions.

24th September 2020

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