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Accountant רואה חשבון Expert-comptable Contador  محاسب خبير Könyvelő ਲੇਖਾਕਾਰ Contabil Contabile

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Government Support Update

October 15, 2020

In his recent announcement, the Chancellor announced new support for employers and businesses.

We have summarised the announcement below, should any of these announcements apply to you or your business, please contact us for more information.

  • Expansion to the Job Support Scheme
  • Extra grants are also being made available for firms in lockdown areas – but again only if they are made to shut.
  • VAT
  • Bounce back loan

Job Support Scheme

What is Rishi Sunak’s Job Support Scheme, who is eligible and how do I apply?

To be eligible, employees must be working at least a third of their contracted hours and be paid for those hours in full by their employer

For the two thirds of the other hours not worked, the Government will pay a third – so 22 per cent of their overall wages

The employer will have to pay the other third of it. It means with the third they are already paying, they will have to fork out 55 per cent of the total wages

The scheme will start on November 1 – the day after the other furlough scheme ends

It’s open to all small and medium sized businesses, even if they didn’t use the furlough scheme beforehand

The Jobs Support Scheme will only help those on the PAYE payroll.

Self-employed workers have been given more time to pay their tax bill and extra grant help

It’s likely that employees won’t have to apply – and the employers will do the work for them

Employees must be on an employer’s PAYE payroll on or before 23 September 2020 to take part

Employees will be able to cycle on and off the scheme and do not have to be working the same pattern each month

Businesses which have been forced to shut due to coronavirus restrictions will be able to claim £3,000 a month from the government.

The new safety net, which will benefit pubs, restaurant, nightclubs and cafes in England, is an increase from the previous £1,500 grant which could be claimed every three weeks.

Larger businesses will be able to get up to £3,000 a month in help after two weeks of closing.

Medium businesses, the help available jumps to £2,000 per month.

Smaller businesses will be able to claim £1,300 a month, up from the £1,000 they can claim now.

VAT

The temporary reduction of VAT rates for hospitality and tourism sector from 20% to 5% would remain in place until 31 March 2021, rather than 13 January.

As well as extending the VAT cut for hospitality and tourism businesses, Mr Sunak announced half a million businesses who deferred their bills will be given more space through a New Payment Scheme.

Rather than paying a lump sum in full at the end March next year, you’ll be able to make 11 smaller interest-free payments during the 2021-22 financial year.
Bounce back loan

Struggling businesses are given more time to pay back Bounce Back loans with a new “Pay As You Grow” scheme.

What is Pay As You Grow?

With Pay As You Grow, small businesses will be able to extend bounce back loan terms from six to 10 years, nearly halving the average monthly repayment.

Firms can also choose to make interest-only repayments, while firms in real trouble can apply to suspend repayments altogether for six months.

Mr Sunak said credit ratings of businesses won’t be affected.

If any of these support schemes would help you or your business please be in touch.

Stay safe

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