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Winter Economy Plan
Chancellor Rishi Sunak's announced his Winter Economy Plan today outlining new measures to help support and protect viable jobs. All the details are still to be released so we will give you a brief overview of the main bits.
Job Support Scheme
The aim of this scheme is to help keep viable jobs open where possible instead of redundancies. Employee's do not need to have been part of the furlough scheme to be eligible however you do need to of been on the PAYE payroll on or before 23rd September 2020 and work at least a third of your normal hours.
If you are on a zero hour contract or irregular hours you will be eligible however details of how this will be calculated have not been released yet.
The scheme will run for 6 months from 1st November 2020, you can go in and out of the scheme however each period must be for a minimum of 7 days.
You get paid in full for the hours you work. The remaining pay is split into 3 equal portions. The first third is paid by the employer, the second third is paid by the government and the last third is not paid at all.
The easiest example is the one given by Rishi. If you normally earn £2000 a month and work half your hours your pay would look like this...
£1000 paid by the employer for hours worked.
£333 topped up by the employer.
£333 topped up by the government.
Total paid to employee is £1666.
Employers are responsible for paying NI and pension contributions.
Employers will still be entitled to the job retention bonus as well as the new job support scheme.
The Winter Economy Plan and SEISS Grants
Those eligible under the Self Employed Income Support Scheme will be able to claim a third grant, same criteria and will be for 20% of their average monthly profit. We are not sure when this will open but it covers the months November, December and January.
The fourth grant will cover February, March and April 2021, no details of this have been revealed yet however as the 19-20 tax returns will have been submitted by then it could mean more people will be eligible. As soon as we know more we will update this post.
The third grant is capped at £1,875.
Deadline for claiming the Second SEISS grant is 19th October 2020
If you haven't claimed yet and would like any help with this at all, please feel free to get in touch.
BBL and CBILS
Bounce back loans and Coronavirus business interruption loans can be extended from 6 years to 10 year.
Businesses struggling to repay the loans can request a 6 month break or just pay the interest. You can also repay early in full or part with no charges so if things are tight it could be worth extending the terms to help short-term cashflow, then over pay when back on an even keel.
VAT for tourism and hospitality
The 5% VAT rate has now been extended to the end of March 2021 under the Winter Economy Plan. We could see this extended again next year depending on the effects on the economy, we could also see another eat out to help out scheme or similar to help out the struggling trades over the winter months. As soon as anything is announced we will update our blog.
VAT that was deferred earlier in the year and self-assessment payments can be extended up to 11 months interest free.
If you would like anymore information on any of these changes please contact us and we will be happy to help.
If you would like to feature your business on our blog and get a big shout out on our social media, to show how you have adapted and thrived please get in touch.
All the best
The DL Accounts Team