The Chancellor of the Exchequer, Rishi Sunak, yesterday (24 September) updated the House of Commons, outlining the next stage of the Government’s support for the economy during the COVID-19 pandemic.
Here's a summary of the Chancellor's update:
- Job Support Scheme: This new scheme will directly support the wages of people in work, giving businesses who face depressed winter demand the option of keeping employees in a job on shorter hours rather than making them redundant. To be eligible, employees must be working at least a third of their normal hours and be paid for that work, as normal, by their employer. With employers, the Government will increase those people’s wages, covering two-thirds of the pay they have lost by reducing their working hours. The employee will keep their job. Anyone who as of yesterday is employed is eligible. The scheme will run from November to April with all SMEs eligible to apply. Businesses will be eligible even if they have not previously used the furlough scheme. To increase the incentives to bring back previously furloughed employees, employers retaining furloughed staff on shorter hours can claim both the Jobs Support Scheme and the Jobs Retention Bonus
- Self-employed grant: This scheme will be extended on similar terms and conditions as the new Job Support Scheme to support self-employed traders through the winter
- Pay As You Grow: To give businesses who have taken out Bounce Back Loans more time and greater flexibility to repay their loans, the Government is introducing Pay As You Grow. Loans can be extended from six to 10 years – nearly halving the average monthly repayment. Businesses who are struggling can now choose to make interest-only payments. No business taking up Pay As You Grow will see their credit rating affected as a result
- Extensions to Government-backed loans: The deadlines for all Government-backed loan schemes will be extended to the end of the year. The Government guarantee on Coronavirus Business Interruption Loans will be extended for up to 10 years. A new, successor loan programme is set to begin in January
- New VAT deferral scheme: For the nearly half a million businesses who deferred more than £30bn in VAT this year, the Government is allowing them to spread their VAT bill over 11 repayments, with no interest to pay, rather than paying in one lump sum in March
- Self-assessed income taxpayers: Any self-assessed income taxpayers who need extra help will be able to extend their outstanding tax bill over 12 months from January
- Hospitality and tourism: the Government is cancelling the planned rise in VAT for hospitality and tourism and will keep the lower 5% VAT rate until 31 March 2021
Find out more on the Government support available to businesses
