Posted October 9, 2020

COVID – Winter Economy Plan

Plan for Employers

The furlough scheme will close at the end of October as planned.  A replacement to the furlough scheme, the Job Support Scheme will be available from 1 November 2020.

The Kickstart Scheme

The Kickstart Scheme has now opened and is available to employers, this scheme provides funding to employers to create job placements for 16 to 24 year olds.  Further information can be found here https://www.gov.uk/government/collections/kickstart-scheme.

The Job Support Scheme

From 1 November 2020 a new job support scheme is available and will run for 6 months.

Under the new scheme your staff will need to work a minimum of 33% of their usual hours and the as their employer you will need to cover this cost.

For the hours not worked by the employee, the government and the employer will each cover 1/3 of the costs.

The government grant will be capped at £697.92 per employee per month.

To be eligible for the scheme the employee must have been on the employers payroll and included on an RTI submission on or before 23 September 2020.

Claims can be made through a new portal from December 2020.

Job Retention Bonus

The job retention bonus of £1,000 will be available to employers, including those using the Job Support Scheme.

A bonus of £1,000 per employee will be payable to businesses for every previously furloughed employee, providing they are still employed at the end of January 2021.

Self-Employed Income Support Scheme

The government has extended the SEISS.  An further taxable grant will be available to businesses that are currently eligible for the SEISS, have continued to trade and are still affected by COVID.  This grant will cover 3 months’ worth of profits (between November and January) at a rate of 20% of profits average monthly profits.

A second grant (the amount has not been confirmed yet) will be available for the period February to April 2021.

VAT Support

The temporary VAT rate cut for the tourism and hospitality sectors has been extended to 31 March 2021.

Any business who deferred their VAT bill to March 2021 will now be able to use the New Payment Scheme.  This scheme will allow businesses to make 11 equal interest-free payments during the 2021/22 tax year.  This New Payment Scheme will be “opt-in” and the process for applying will be put in place by early 2021.

Support for paying Self-Assessment Tax

Self-employed individuals affected by COVID who deferred their July 2020 payment on account will now be able to defer this further.  Tax payers will now be able to make 11 equal payments from January 2021 – meaning the liability won’t be paid in full until January 2022.

Tax payers will also be able to defer payments due by January 2021 and pay these over a twelve-month period. This deferment is only available to taxpayers with liabilities due under self-assessment on 31 January 2021 of up to £30,000.

An announcement has not yet been made about whether interest will be charged.  As this will be under the existing time to pay arrangements it is likely that interest will be applied.  The deferment will need to be applied for through your personal tax account or via the telephone helpline if you do not have a personal tax account.

Business Loans

The CIBLS and BBLS loan schemes deadline for applications have now been extended to 30 November 2020.

There have been some changes as outlined below:

Bounce Back Loans

BBLS loans allow businesses to borrow between £2,000 and £50,000, capped at 25% of turnover.  The business needs to have been trading on 1 March 2020 and not in financial difficulty on 31 December 2019 to be eligible.

No repayments need to be made during the first 12 months and the government cover the interest for the first 12 months, this remains the same as the previously reported.

A New Pay as you Grow option has been made available to businesses to give more choice and flexibility with repayments.

Under the Pay as you Grow all businesses that have borrowed money under the BBLS will be able to repay their loan over 10 years (reducing the average monthly payment by almost 50%).  The businesses will also have the option to move to interest only repayments for up to six months (this option can only be used once).

Coronavirus Business Interruption Loan Scheme

The government also intends to allow CIBLS lenders to extend the term of the CIBLS loan to 10 years.

Grant for Forced Closures

Should the government require your business to close because of COVID a grant of up to £1,500 every 3 weeks is available.  The grants will be based on the rateable value of your property.

Details of how to claim this grant have not yet been released.