Coronavirus (Covid-19) Hub

Covid-19 : Business Support 24.09.20 – Update 47

Winter Economy Plan

The Government has announced this afternoon that they are taking further action to support firms affected by the coronavirus crisis announcing the Winter Economy Plan outlining the following:

Job Support Scheme

The Job Support Scheme will directly support the wages of people in work, giving businesses who face depressed winter demand the option of keeping employees in a job on shorter hours rather than making them redundant:

  • The scheme will support viable jobs so employees must be working at least a third of their normal hours and be paid for that work, as normal, by their employer.
  • The Government, together with employers, will increase those people’s wages covering 2/3 of the pay they have lost by reducing their working hours.
  • Anyone who as of yesterday (23rd September 2020) is employed is eligible.
  • The level of grant will be calculated based on employee’s usual salary, capped at £697.92 per month.
  • Running November to April, all small & medium sized businesses are eligible to apply. But larger businesses only when their turnover has fallen.
  • Businesses are eligible even if they have not previously used the furlough scheme.
  • Employers retaining furloughed staff on shorter hours can claim both the Jobs Support Scheme and the Jobs Retention Bonus. This significantly increases the incentives to bring back previously furloughed employees.

Self Employed Income Support Scheme

To support self-employed traders through the winter the Government has announced they are extending the existing self-employed grant on similar terms and conditions as the new Jobs Support Scheme.

  • 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. The initial lump sum will cover three months’ worth of profits for the period from November to the end of January next year. This is worth 20% of average monthly profits, up to a total of £1,875.
  • An additional second grant, which may be adjusted to respond to changing circumstances will be available for self-employed individuals to cover the period from February 2021 to the end of April.

Bounce Back Loans

Bounce Back Loans have given over a million small businesses a £38 billion boost to survive the pandemic. To give those businesses more time and greater flexibility to repay their loans, the Government are introducing Pay As You Grow.

The new Pay As You Grow scheme offers the following:

  • Loans can be extended from six to ten years – nearly halving the average monthly repayment.
  • Businesses who are struggling can now choose to make interest-only payments.
  • Anyone in trouble can apply to suspend repayments altogether for up to six months.

Extending Government Backed Loans, including CBILS

To give businesses longer to apply for all of the Government backed loan schemes, the deadlines are extended to the end of the year. Additionally the Government has confirmed they are starting work on a new, successor loan programme, set to begin in January.

VAT cut extended

As part of the package, 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.

New VAT deferral scheme

Nearly half a million businesses deferred more than £30 billion of VAT this year. Those payments are all due in one lump sum in March. Instead, the Government are allowing businesses to spread their VAT bill over 11 repayments, with no interest to pay.

Income tax

Around 11 million self-assessment taxpayers will be able to benefit from a separate additional 12-month extension from HMRC on the “Time to Pay” self-service facility, meaning payments deferred from July 2020, and those due in January 2021, will now not need to be paid until January 2022.

ASM Contacts

ASM Accountants Logo

Grainne Quinn – Magherafelt
grainne.quinn@asmmagherafelt.com

Ian Finnegan – Newry
ian.finnegan@asmnewry.com

Caroline Keenan – Belfast
caroline.keenan@asmbelfast.com

Michael P. O’Hare – Dundalk
michael.p.ohare@asmdundalk.com

Alistair Cooke – Dungannon
alistair.cooke@asmdungannon.com