Winter Economy Plan
On Thursday 24th September, the Chancellor announced our Winter Economy Plan. This phase of economic recovery from coronavirus is focused on supporting viable jobs, helping companies with cashflow, and protecting people’s incomes throughout the winter.
Job Support Scheme (JSS)
The Job Support Scheme allows employees who work at least 33% of their normal hours to receive a contribution from both the Government and their employer to ensure that they can continue to be paid the majority of their wages. An employer will continue to pay its employee for time worked, but the burden of hours not worked will be shared equally between the employee, employer and government (one third each way). The JSS is focused on viable jobs, so employees need to be working at least a third of their normal hours.
This ensures that companies that have been impacted by coronavirus can keep staff on reduced hours rather than laying them off, as demand falls during the winter months. The JSS will open from 1 November, and run for six months until the end of April 2021 - it can be used alongside the existing Coronavirus Job Retention Scheme. More information about the JSS is available on the Government website at:
Pay As You Grow Scheme
Businesses which previously used the Bounce Back Loan scheme will now have more repayment flexibility. Loan terms will be extended to ten years–this will reduce average monthly repayments by almost half (on an average £30,000 loan, this reduces the monthly payment from £532 to £309). Businesses will also be able to move to interest-only repayments for periods of up to six months –or to pause repayments entirely for the same period. It will have no impact on a business’s credit rating if they take up any of these options. Coronavirus Business Interruption Loan Scheme lenders will also be able to extend their loans to ten years via an extended Government guarantee, providing more flexibility and support for businesses.
Self-Employed Income Support Scheme (SEISS)
The existing SEISS is being extended with a further grant for the self-employed. The grant will be limited to self-employed individuals who are currently eligible for the SEISS and are actively continuing to trade but facing reduced demand. The scheme will last for 6 months, from November 2020 to April 2021. The grant will match the average grant of the Job Support Scheme, and represent 20% of three month earnings, for November to January.
Alongside these policy measures, the Government is extending the temporary 5% VAT rate to March 2021 - to continue supporting the 150,000 businesses and 2.4 million jobs in tourism and hospitality - and extending the closing dates for the Bounce Back Loan Scheme, Coronavirus Business Interruption Loan Scheme, and Futures Fund until November 30th 2020. Businesses which have deferred their VAT payments until March 2021 will be able to make their repayments in small monthly payments, to help with their long-run cash flow and liquidity until the end of March 2022. Around 1.5 million businesses who pay through income tax self-assessment (and thus benefitted from Self-Assessment Tax Deferral) will see the Time To Pay service extended until the end of January 2022.
You can read more about the Winter Economy Plan in the attached letter from the Chancellor below, or on the Government website at: