The Chancellor has today, 24th September, announced in Parliament the Government’s covid-19 NEW support measures for businesses and their employees. The main points are :-
New Job Support Scheme – when the current Job Retention/Furlough Scheme ends on 31st October 2020, from 1st November 2020 the new Job Support Scheme will come into effect for 6 months (ending 30th April 2021). The new scheme will support employers keep more employees on their payroll, by agreeing with employees to work part-time work for at least 33.3% of their normal hours.
The Government will grant fund 33.3% of the employees ‘normal hours not worked’ but only if the employer also pays 33.3% of the employee’s ‘normal hours not worked’. The employee will therefore lose 33.3% of their pay from their ‘normal hours not worked’. For example, if an employee is paid £400 gross for 36 hours normal hours per week, then reduces to a minimum 12 working hours under the new scheme. The employer pays for 12 hours worked + 8 hours not worked (i.e. 1/3 of the ‘normal hours not worked’ of 24) = total £222.22 gross pay, the Job Support Scheme grant is 8 hours paid to the employee = £88.89 gross, which makes a grand total of £311.11 gross pay. The employee therefore loses 8 hours pay = £88.89, which equates to 22.2% of their usual gross pay.
The Government grant will be up to a maximum of £697.92 per month per employee. Both employers and employees do not have to be or been in the current Job Retention/Furlough Scheme and also it will not conflict an employer receiving the Jobs Retention Bonus (worth up to £1,000 per employee – www.gov.uk/government/publications/job-retention-bonus/job-retention-bonus ), if furloughed employees are kept on payroll beyond 1st February 2021.
HMRC will be issuing more detailed guidance at a later date about the new Job Support Scheme, for employers, employees and payrolls.
Self-Employed Income Support Scheme Grant (SEISS) is to be extended, but reduced, for a further 3 months from 1st November 2020 to 31st January 2021. This grant will be worth 20% of average three year profits up to a maximum grant of £1,875 for the 3 months. The Government have said they are likely to extend the grant further for the 3 months to 30th April 2021 but on a further reduced basis. www.gov.uk/guidance/claim-a-grant-through-the-coronavirus-covid-19-self-employment-income-support-scheme
VAT Return summer 2020 payment deferral originally to 31st March 2021 is now extended to 28th February 2022 by 11 monthly interest free payments between April 2021 and February 2022.
Self-Assessment Income Tax July 2020 instalment payment deferral originally to 31st January 2021 is now automatically extended to 31st January 2022.
Bounce Back and CBILS loans repayments can be extended from 6 years term to 10 years term. For the Bounce Back loans only the Government will provide more repayment flexibility by request with up to 6 months repayment holidays with up to 6 months interest free. More guidance to be issued later.
Bounce Back and CBILS loans applications are extended from the original deadline of 30th September 2020 to 30th November 2020. www.gov.uk/guidance/apply-for-a-coronavirus-bounce-back-loan
Lower 5% Output VAT rate for the Hospitality and Tourism businesses will be extended until 31st March 2021. www.gov.uk/guidance/vat-reduced-rate-for-hospitality-holiday-accomodation-and-attractions
The Government Autumn Budget, usually held in November each year, will not be held in 2020, this year. Look on our website for previous budgets. If you require help or support with any of the above please email us on [email protected] and we will promptly contact you in our office hours 9am-5pm.