Increased financial support for businesses and workers


Yesterday the government announced it will increase the reach of its winter support schemes to further safeguard livelihoods and jobs across the UK throughout the difficult period to come.

 

HMRC WEP

 

The Winter Economy Plan

Since the emergence of the COVID-19 pandemic, the government has taken swift action to to mitigate the worst economic impacts.

Businesses have received billions in loans, tax deferrals, Business Rate reliefs, and general and sector-specific grants.

The government now introduces further targeted measures in response to the ongoing situation with the aim to protect UK jobs and businesses in the face of this uncertain economy.

Winter Economy Plan

Support measures include;

  • A new Job Support Scheme and an extension to the Self-Employed Income Support Scheme (SEISS)
  • A continuation of the reduction in VAT\
  • An extension to the application period for the government-backed loans schemes, Bounce Back Loan Scheme (BBLS), Coronavirus Business Interruption Loan Scheme (CBILS), Coronavirus Large Business Interruption Loan Scheme (CLBILS) and Future Fund
  • Changes to the terms of repayment for Bounce Back Loans (BBLS) and Coronavirus Business Interruption Loans (CBILS)
  • A new payment schemes for VAT and Self-Assessment tax liabilities.

New Job Support Scheme 

Source, https://www.gov.uk/government/publications/the-job-support-scheme/the-job-support-scheme

 

Yesterday the government updated the scheme previously announced on 24th September to differentiate between;

– Businesses facing decreased demand as a direct result of coronavirus restrictions set by one or more of the four governments of the UK.

– Businesses that are legally required to close their premises as a direct result of coronavirus restrictions set by one or more of the four governments of the UK.

 

The Job Support Scheme will open from 1 November 2020 and run for 6 months, until 30 April 2021. The government will review the terms of the scheme in January.

Employers will be able to claim in arrears from 8 December 2020, with payments made after the claim has been approved. Neither the employer nor the employee needs to have benefitted from the Coronavirus Job Retention Scheme to be eligible for the Job Support Scheme.

An employer can claim the JSS Open and JSS Closed grant at the same time for different employees but not for a single employee under both schemes at the same time.

 

 

Businesses that are facing decreased demand as a direct result of coronavirus restrictions set by one or more of the four governments of the UK can get support through The Job Support Scheme (JSS) Closed.

 

Job Support Scheme Open

 

Open businesses which are experiencing decreased will be given extra help to keep staff on as government significantly increases contribution to wage costs under the Job Support Scheme, and business contributions drop to 5%.

 

The employee will need to work a minimum of 20% of their usual hours and the employer will continue to pay them as normal for the hours worked.

 

Alongside this, the employee will also receive 66.67% of their normal pay for the hours not worked – this will be made up of contributions from the employer and from the government.

 

The employer will pay 5% of reference salary for the hours not worked, up to a maximum of £125 per month, with the discretion to pay more than this if they wish.

 

The government will pay the remainder of 61.67%, of reference salary for the hours not worked, up to a maximum of £1,541.75 per month.

 

This will ensure employees continue to receive at least 73% of their normal wages, where they earn £3,125 a month or less.

 

 

Businesses that are legally required to close their premises as a direct result of coronavirus restrictions set by one or more of the four governments of the UK can get support through The Job Support Scheme (JSS) Closed.

Employers that have been legally required to close their premises as a direct result of coronavirus restrictions set by one or more of the four governments of the UK will qualify for JSS Closed.

 

Employees who cannot work due to these restrictions will receive two thirds of their normal pay, paid by their employer and fully funded by the government, to a maximum of £2,083.33 per month, although their employer has discretion to pay more than this if they wish .

 

This will help protect employee incomes, limit unemployment and retain employer-employee matches so that these premises are able to reopen as quickly as possible when circumstances allow.


Continuation of the reduction in VAT

To continue supporting the cashflow and viability of over 150,000 UK hospitality and tourism businesses and to protect 2.4 million jobs, the government is extending the temporary reduced rate of VAT (5%) from 12 January to 31 March 2021. 
 

 

Extension to the application period for the government-backed loans schemes, BBLS, CBILS, CLBILS and Future Fund

The government is extending applications to the four temporary loan schemes, Bounce Back Loan Scheme (BBLS), Coronavirus Business Interruption Loan Scheme (CBILS), Coronavirus Large Business Interruption Loan Scheme (CLBILS) and Future Fund, to 30 November 2020 for new applications.  
 

 

Changes to the terms of repayment for Bounce Back Loans (BBLS) and Coronavirus Business Interruption Loans (CBILS)

Under the new Pay as you Grow options, Bounce Back Loan borrowers will all be offered the choice of more time and greater flexibility for their repayments. 
 
The Pay as you Grow scheme offers borrowers the option to repay their loan over a period of up to ten years. This will reduce their average monthly repayments on the loan by almost half. UK businesses will also have the option to move temporarily to interest-only payments for periods of up to six months (an option which they can use up to three times), or to pause their repayments entirely for up to six months (an option they can use once and only after having made six payments).  
 
The also government intends to allow CBILS lenders to extend the term of a loan up to ten years. 

 

New payment schemes for VAT and Self-Assessment tax liabilities.

The government will give businesses which deferred VAT due in March to June 2020 the option to spread their payments over the financial year 2021-2022. Rather than paying in full at the end of March 2021, businesses will be able to choose to make 11 equal instalments over 2021-22. All businesses which took advantage of the VAT deferral can use the New Payment Scheme. Businesses will need to opt in, but all are eligible. HMRC will put in place an opt-in process in early 2021. 


This sounds great but how can you help me?…

If you´re unsure of how these new measures could help your business or simply don´t have the team power to do anything about it, we can help.

 

Our clients get results through the tried and tested ActionCOACH system. Along with accountability for actions, our expert resources ensure you make the most of every business opportunity.

 

Our service covers areas like:

 

  • Strategic Finance – from understanding your financial documents to leveraging the information they yield.
  • Planning – formalising ideas and goals into Specific, Measured, Actionable, Realistic, Time bound plans to ensure growth
  • Accountability – a shoulder to lean on, an ear to listen. A great advisor and someone to hold you accountable.

 

Get in touch to talk more about the Winter Economy Plan and what it could mean for your business

 

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In the meantime, read more about how coaching can yield solutions to your current business challenges.

 

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