Today’s Announcement: Winter Economy Plan Snapshot
Here are some key points from Rishi Sunak’s announcement earlier today when he unveiled measures to protect jobs beyond the Coronavirus Job Retention Scheme, which ends on the 31st October.
Jobs Support Scheme
- A new Jobs Support Scheme has been announced today, which would subsidise the wages of people in work to replace the furlough scheme when it finishes at the end of October
- The scheme will run for six months starting in November 2020
- Businesses will have the option of keeping employees in their job on shorter hours, rather than making them redundant
- Employees must work a third of their usual hours, paid for by their employer as normal
- For the time they are not working, the government will pay a third of their usual pay, and the employer will pay another third of their usual pay
- Including the pay for the hours they are working, the Treasury says this means workers will receive 77% of their usual pay
- The scheme will be targeted at businesses that need it most, all small and medium-sized firms (usually defined as 250 employees or less) but only for big companies if turnover has fallen by a third
- Firms can claim both the Jobs Support Scheme and the Jobs Retention Bonus simultaneously
As an example this will mean if someone earning £2,000 a month was working half their hours, they would receive £1,000 of normal pay, plus they would get £333 extra from their employer and £333 from the government.
Employees must have been on the firm’s payroll since at least 23 September 2020, and can be moved on and off the scheme, or work different hours. However, each working arrangement must cover at least seven days.
As with the furlough scheme, employers will be reimbursed by the government after the work has been done.
Business Loans and VAT
There will also be a “Pay as you Grow” loan for businesses to help repay state-backed business loans and loans can be extended from six to ten years, almost halving repayments. Interest-only payments can be made, and firms in financial difficulty can suspend their pay outs.
All of the government’s state-backed loan schemes will now be extended until the end of 2020, and the government is starting work on a new guarantee loan programme to begin in January 2021.
The Chancellor will allow businesses to spread their VAT bills over 11 separate payments. The two sectors most affected by coronavirus restrictions, hospitality and tourism, will also see their VAT rates frozen at 5% until March 2021.
You can find more details on today’s announcements via this BBC article
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