Updated: 24th September 2020
Rishi Sunak, Chancellor of the Exchequer, unveiled the Winter Economy Plan to support businesses and employees during the coronavirus pandemic. As the furlough scheme is due to end on 31 October, the next stage of the economic plan consists of a replacement for the furlough scheme and cash flow support to businesses most in need as we draw closer to the winter months.
The Job Support Scheme will replace the Coronavirus Job Retention Scheme and operate for six months, from November 2020 to April 2021. The scheme will support viable jobs by subsiding the wages of employees who have not yet returned to working their full contracted hours, reducing the likelihood of redundancies.
The furlough replacement scheme targets all small and medium-sized firms in need of support; however, larger firms will only be considered if turnover has dropped by a third.
Employers will be able to keep employees in jobs on reduced hours; however, they must work a third of their usual hours which will be paid by the employer as normal. For the remaining hours not worked, the government will pay a third of the usual pay. Taking into consideration the pay for hours worked; workers will receive 77% of their usual pay.
Employers will be able to claim the job support scheme and the bonus from the job retention scheme.
More information is due to be released and the Job Support Scheme policy paper can be found on the government website.
Grant for self-employed workers are also extended.
The Winter Economy Plan announced that tax bills deferred to March 2021 can now be spread over 11 repayments and no longer need to be repaid by the end of the financial year.
The reduced 5% VAT rate for the hospitality and tourism sectors will be extended from January 13 to March 31, 2021.
As part of the Pay As You Grow initiative, the repayment period for Bounce Bank Loans and Coronavirus Business Interruption Loan Scheme (CBILS) loans will be extended from six to 10 years, with repayment holidays available.