Furloughed Refreshed (and other announcements)
As the way we go about our lives is ever changing, the Chancellor today announced a raft of new measures for businesses and employees:
The Furlough scheme will not be extended past 31 October 2020. Instead it is going to be replaced by the Jobs Support Scheme. Under the new scheme, the Government will subsidise the pay of employees who are working fewer hours due to the lower demand. A few key points below:
- It will apply to staff who can work at least a third of their usual hours
- Employers will pay staff for the hours they do work
- For the hours employees can’t work, the government and the employer will each cover one third of the lost pay
- The grant will be capped at £697.92 per month
- All small and medium sized businesses will be eligible for the scheme
- Larger business will be eligible if their turnover has fallen during the crisis
- It will be open to employers across the UK even if they have not previously used the furlough scheme
- The scheme will run for six months starting in November
Support for Self Employed
The Self Employment Income Support Scheme (SEISS) will be extended. Grants will be available to cover profits for the period from November 2020 to the end of January 2021 and will be based on 20% of average monthly profits (up to £1,875).
A further grant will be available to the self-employed to cover February 2021 to the end of April 2021.
No additional details yet, but we expect the qualifying conditions to be the same if not similar to existing grant conditions.
- Bounce Back loan repayments will be extended from six years to 10 years. Effectively having the repayments.
- CBILS repayments can also be extended from six years to ten years.
- Businesses struggling can choose to make interest only payments for six months.
- Credit ratings for businesses with such loans will not be adversely affected.
- Deferred VAT liabilities from earlier on can now be paid in 11 smaller interest-free instalment (originally due 31 March 2021).
- Deferred Self Assessment tax will be able to defer the tax payments to January 2022.
There was also the an extension to the 15% emergency VAT cut for the tourism and hospitality industries. The extension now runs up to 31 March 2021.
The fact that the normal Autumn Budget was cancelled to be replaced with today’s announcement, shows the Government cannot focus on the longer term future just yet and it still has to be in fire fighting mode as everything changes again!
Please get in contact if you have any questions.
MATCH Accounting Limited