Last Thursday, Rishi Sunak unveiled the government’s plan to protect jobs and support businesses through the winter months.
Here’s everything you need to know about the new Winter Economy Plan.
Support for Workers
A new Job Support Scheme will be introduced from 1 November to protect viable jobs in businesses who are facing lower demand over the winter months due to coronavirus. The scheme will run for six months.
Under the scheme, which aims to keep employees attached to their workplace the government will contribute towards the wages of employees who are working fewer than normal hours due to decreased demand.
Employers will continue to pay employees for the hours they work, but for the hours they don’t work, the government and the employer will pay one third of the salary each, allowing the employee to receive two-thirds of their salary for the hours they are not working.
To be a part of the scheme, employees will need to still be working at least 33% of their usual hours.
The scheme is open to all businesses across the UK, even if they have not taken part in the furlough scheme.
Tax cuts and deferrals
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. This is to support the cash flow for businesses in this hard-hit industry, allowing them to keep their current staff or hire new ones.
In addition, up to half a million business who deferred their VAT bills will be given more breathing space through the New Payment Scheme, which gives them the option to pay back in smaller instalments. Rather than paying a lump sum in full at the end March next year, they will be able to make 11 smaller interest-free payments during the 2021-22 financial year.
Giving businesses the flexibility to pay back loans
If your business has taken out a Bounce Back loan, you will now be offered flexibility in your repayments through a Pay as You Grow flexible repayment system.
This includes extending the length of the loan from six years to ten, which will cut monthly repayments by nearly half. 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 government will also give Coronavirus Business Interruption Loan Scheme lenders the ability to extend the length of loans from a maximum of six years to ten years if it will help businesses to repay the loan.
In addition, the Chancellor also announced he would be extending applications for the government’s coronavirus loan schemes that are helping over a million businesses until the end of November.
If you need additional support for your business to help with your staffing requirements, we are running our 12-Month COVID Recovery Offer until August 2021. Speak to a member of our team to find out more about how we can help you.