Winter Economy Plan
Following the further restrictions Boris announced earlier this week due to fears of a second wave, today Rishi Sunak delivered his Winter Economy Plan. Here’s a breakdown of who will and won’t be in receipt of help under the new proposal.
Owner Managed Companies
Whilst the plan offered an extension to the Self Employment Income Support Grant (SEISS), it didn’t give any further guidance or support to owner managed companies who pay themselves a basic wage and top-up with dividends. With a predicted additional 6 months of restrictions, which are likely to heavily impact businesses, this means an entire year that some business owners will have received little to no financial assistance from the Government. Now is the time to think about what you can do to help your business survive this, such as adapting your costs and maximising revenues.
Tax Cuts and Deferrals
Businesses in the tourism and hospitality sector have been granted an extension on the VAT reduction to 5%, this is now expected to be in place until the end of March 2021.
Businesses who used the New Payment Scheme to defer VAT bills will now be able to make 11 smaller interest-free payments during the 2021/22 financial year, rather than paying a lump sum at the end of March 2021.
Self-assessment tax payers will also receive a HMRC 12 month extension on the ‘Time to Pay’ facility.
A new ‘Pay as You Grow’ flexible repayment system has been put in place for those businesses who took out a Bounce Back Loan. This including extending the length of the loan from 6 to 10 years, cutting monthly repayments by nearly half. Payment holidays and interest-only periods will also be available under the new system.
A loan extension of 6 to 10 years has also been granted to businesses who received financial support under the Coronavirus Business Interruption Loan Scheme.
In addition to this, the Chancellor announced that applications are now extended for the Government’s coronavirus loan schemes until the end of November. Meaning that businesses now have another change to apply for the Coronavirus Business Interruption Loan Scheme, the Coronavirus Large Business Interruption Loan Scheme, the Bounce Back Loan Scheme and the Future Fund.
Job Support Scheme
Starting on 1st November as the furlough scheme ends, the Job Support Scheme will aid those working fewer than normal hours due to decreased business demand. To be eligible, the employee must be working at least 33% of their usual hours, which will be paid by their employer. For the hours not worked the employee will receive 66% of their usual salary, which will be paid by the employer and the government. This will be capped at £697.92 per month, which equates to a usual salary of £2,500 per month. This scheme is open to all UK companies, even if they have not previously used the furlough scheme.
If following the Chancellor’s announcement today you wish to take advice on the future of your business, get in touch on firstname.lastname@example.org