Winter Economy Plan
The Chancellor, Rishi Sunak has unveiled new measures to protect jobs as part of the government’s ‘winter economy plan’.
Furlough, which comes to an end in October will be replaced with the Job Support Scheme from 1 November.
Under the scheme, which will run for six months, the government will contribute towards the wages of employees who are working fewer than normal hours due to decreased demand and employers will continue to pay the wages of staff for the hours they work. For the hours not worked, the government and the employer will each pay one third of their equivalent salary.
Employees must be working at least 33% of their usual hours. The level of grant will be calculated based on employee’s usual salary, capped at £697.92 per month.
The scheme aims to stop mass job cuts after the introduction of new government measures to tackle the upsurge in coronavirus cases.
The Job Support Scheme will be open to businesses across the UK even if they have not previously used the furlough scheme, with further guidance being published in due course.
The Chancellor announced support for self-employed individuals by extending the Self Employment Income Support Scheme Grant (SEISS). An initial taxable grant will be provided to those who are currently eligible for SEISS and are continuing to actively trade but face reduced demand due to coronavirus.
As part of the new package of support, the government also announced it will extend the temporary 15% VAT cut for the tourism and hospitality sectors to the end of March next year.
Business who deferred their VAT bills will be given more time to pay back, with the option of paying smaller installments through the New Payment Scheme.
There will be greater flexibility for firms repaying a Bounce Back Loan; measures include extending the length of the loan from six years to ten, interest-only periods of up to six months and payment holidays will also be available to businesses. These measures will further protect jobs by helping businesses recover from the pandemic.
The Coronavirus Business Interruption Loan Scheme will give lenders the ability to extend the length of loans from a maximum of six years to ten years to help businesses to repay the loan.
