Central to the plan is a new Job Support Scheme, extension of Self Employment Income Support Scheme, and flexibility for over one million businesses to pay back loans.
The Chancellor Rishi Sunak today outlined additional government support to provide certainty to businesses and workers impacted by coronavirus across the UK.
Delivering a speech in Parliament, the Chancellor announced a package of measures that will continue to protect jobs and help businesses through the uncertain months ahead as we continue to tackle the spread of the virus. The package includes a new Jobs Support Scheme to protect millions of returning workers, extending the Self Employment Income Support Scheme and 15% VAT cut for the hospitality and tourism sectors, and help for businesses in repaying government-backed loans.
The announcement comes after the Prime Minster set out further measures to combat the spread of the virus over the winter, while preserving the ability to grow the economy.
Support for workers
A new Job Support Scheme will be introduced from 1 November to protect viable jobs in businesses who are facing lower demand over the winter months due to coronavirus.
Under the scheme, which will run for six months and help keep employees attached to the workforce, the government will contribute towards the wages of employees who are working fewer than normal hours due to decreased demand.
Employers will continue to pay the wages of staff for the hours they work – but for the hours not worked, the government and the employer will each pay one third of their equivalent salary.
Support for the self-employed
In addition, the Government is continuing its support for millions of self-employed individuals by extending the Self Employment Income Support Scheme Grant (SEISS).
Two lump sums will cover six months’ worth of profits for the period from November to the end of April next year.
Tax cuts and deferrals
As part of the package, the government also announced extension of tax cuts and deferrals.
The government will extend the temporary 15% VAT cut for the tourism and hospitality sectors to the end of March next year.
The New Payment Scheme will give those who deferred their VAT bills the option to pay back in smaller instalments.
Meanwhile, self-assessment taxpayers will be able to use the HMRC’s “Time to Pay” self-service facility to postpone income tax payments up to January 2022.
Flexibility to pay back loans
A new Pay as You Grow flexible repayment system will help businesses who took out a Bounce Back Loan repaying it in ten, rather than six, years. Interest-only periods of up to six months and payment holidays will also be available to businesses.
Applications for the government’s coronavirus loan schemes – Coronavirus Business Interruption Loan Scheme, the Coronavirus Large Business Interruption Loan Scheme, the Bounce Back Loan Scheme and the Future Fund – will be extended till the end of November.
Read more about loan repayments here.
Investment in public services
At the start of the pandemic, the Chancellor pledged to give the NHS and public services the support needed to respond to coronavirus. As of today, £68.7 billion of additional funding has been approved by the Treasury, including £24.3 billion since the Summer Economic Update in July.
This funding has helped ensure the procurement of PPE for frontline staff, provided free school meals for children while at home and protected the country’s most vulnerable.
The £12 billion funding to roll-out the Test and Trace programme has played a key role helping to unlock the economy, enabling businesses like restaurants and bars to serve customers again.
The Treasury has also guaranteed the devolved administrations will receive at least £12.7 billion in additional funding. This gives Scotland, Wales and Northern Ireland the budget certainty to for coronavirus response in the months ahead.
Mike Cherry OBE, Federation of Small Businesses National Chair, welcomed the government’s support for businesses, saying that it was a swift and significant intervention – extending emergency SME loans, creating new wage support for small employers and the self-employed, and providing cashflow help on VAT deferrals and new Time To Pay for any tax bills to HMRC. “The UK’s small businesses are facing an incredibly difficult winter. Today’s support package is the flipside of the coin to Tuesday’s COVID-19 business restrictions,” he added.
Image: Millenium Bridge and St. Paul’s Cathedral in London, UK, by Boris Stroujko / Adobe Stock