On September 24th, the UK chancellor announced the Winter Economy Plan. Some additional measures are being put into place to support businesses and employees who have found themselves struggling as a result of Covid-19.
Rishi Sunak outlined the reasons for the importance of this new support package. He cited the increasing number of cases as a threat to the “fragile economic recovery” that the UK is currently undertaking, and the need for an alternative support program to what has been offered at earlier stages of the pandemic. He maintains that the purpose for these measures is to ensure job security. This will be done by focusing on four areas: support for workers, tax cuts and deference, loan repayment flexibility and public service investment.
Support for workers
In November a new Job Support Scheme will be introduced to lend support to jobs in industries that are suffering from the decreased footfall as a result of the current restrictions. This grant will only be available for roles that are operating at a minimum of a third of their usual hours to prove their viability. This measure can work in conjunction with the existing Jobs Retention Bonus.
Since the plans release, on 9th October the Job Support Scheme has been expanded. Businesses forced to close due to restrictions imposed as a result of the pandemic are also included in the support. The government plans to cover ⅔, 67%, of the wages of employees not working during enforced closures.
Following feedback from business leaders, the Job Support Scheme has once again been reconfigured to better suit the needs of the workforce.
The Self Employment Income Support Scheme Grant has been extended to cover until the end of January 2021. There is also a second grant available to cover February to April, however the details of this are yet to be announced as they may change in response to the situation.
Tax cuts and deferrals
The temporary VAT cut across the hospitality and leisure industries has been extended to cover the rest of the tax year.
Businesses who chose to defer their VAT payments have been given extra breathing room in the form of splitting their bill into eleven monthly instalments with the “New Payment” Scheme. The monthly payments will stretch across the 21-22 tax year and be interest free.
Self assessment tax payers can also benefit from the new option of deferring payment to HMRC for an extra twelve months. This “Time To Pay” Scheme can be applied for directly via the GOV UK website, and providing you have debts of less than £30,000, approval will be granted automatically and immediately.
These tax payment deferral schemes are accessible online, through the UK government’s website. You can also get in touch using the telephone, however bear in mind that lines are unusually busy and a long wait is likely, so using the online service is recommended.
Talk to Neil Smith Accountancy regarding your own self assessment taxes; during the tricky and stressful times brought about by the ongoing pandemic, ensuring your taxes are filed correctly, compliantly and cost-effectively by an expert can provide real peace of mind.
Loan repayment flexibility
Tweaks have been made to the repayment agreements for businesses who have benefited from the Bounce Back Loan scheme. Known as ‘pay as you grow’, it will provide the option of payment holidays and interest-free periods alongside the option to extend the loan term from six years to ten. Businesses who received the Coronavirus Business Interruption Loan can also extend their terms to ten years. Applications for these loans and Future Fund Loan will remain open until the end of November.
Public service investment
A further £24.3bn funding has been agreed by the Treasury to support the NHS and other public services. Previous funding has been spent on maintaining supplies of PPE, developing the Test and Trace system and supporting the devolved administrations; all of which have been vital parts of the Covid response.
We know that this winter will pose challenges for employees and business owners, however this new package has been applauded by business leaders who hope that it will help to bridge the gaps that have been left by the Coronavirus.
For small business advice and expert accounting services, get in touch with the team at Neil Smith Accountancy; whether you are a long serving establishment or a recent or imminent start up, we have the knowledge and experience required to help you work compliantly and efficiently, and to guide you through the difficult times we are all going through.