Winter Economy Update

Today, the Chancellor outlined the Winter Economy Plan to help support businesses.

Support for workers: The Coronavirus Job Retention scheme (CJRS) will end as planned on 31st October and the new Jobs Support Scheme will be introduced from 1st November which involves the government supporting the wages of people in work, giving employers the option to keep people in work on shorter hours, rather than make them redundant.

Employees will have to work at least 33% of their normal hours, and be paid for that by the employer. The government and the employer will each pay one third of the remaining hours not worked.The level of grant will be calculated based on employee’s usual salary, capped at £697.92 per month.

Coronavirus Loan schemes: Those who have taken out a Bounce Back Loan (BBL) now have the availability of flexible repayments thanks to the new Pay as You Grow scheme. The terms of these loans can be extended from 6 to 10 years. Interest-only periods of up to six months and payment holidays will also be available to businesses who are struggling with the repayments.

Mirroring the above the Coronavirus Business Interruption Loan Scheme (CBILS) lenders now have 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.

The Coronavirus Business Interruption Loan Scheme (CBILS), the Coronavirus Large Business Interruption Loan Scheme (CLBILS), the Bounce Back Loan Scheme (BBLS) and the Future Fund loan schemes have all been extended until the end of November.

Tax and VAT deferrals: The VAT cut for the hospitality, tourism and leisure industry to 5%, was due to last until January but will now run until the end of March 2021.

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.

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.

Self Employment Income Support Scheme (SEISS): The SEISS has been extended until the end of April 2021. 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 2021.

If you are concerned about the impact that COVID-19 is having on your business or personal finances, please contact your usual Monahans representative or contact your local office. We are here to help.