‘Developing plans to protect jobs and the economy over the winter period.’
Sunak
Here are our key points from Sunak’s announcements today. They are brief, and more information will follow on our website and our regular coronavirus updates guides. We would recommend to work with your accountant to draft a plan on how this may affect you and your Business.
VAT cut extension
The 5% reduced rate of VAT in the hospitality, hotel and holiday accommodation sector cut has been extended until the 31st March 2021.
Coronavirus Loan Schemes
The application deadline for all Coronavirus Loan Schemes have been extended to the 31st December 2020. Therefore, Businesses requiring a Bounce Back loan or a Coronavirus Business Interruption Loans Scheme loan can still apply to the 31st December 2020. Contact us if you would like to proceed on this.
1/ Bounce Back Loans have given over a million small businesses a £38 billion boost to survive this pandemic.
To give those businesses more time and greater flexibility to repay their loans, we’re introducing ??? ?? ??? ????. pic.twitter.com/lgYnL0dMe5
— Rishi Sunak (@RishiSunak) September 24, 2020
More time and greater flexibility for the Bounce Back Loan repayments have been extended from the six years to up to 10 years.
More time on deferred tax bills
The deferred VAT bills previously due to be paid 31st March 2021 can now be spread over 11 smaller repayments which was to be coming due 31st March 2021. More details to follow as they are announced by central government.
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.
Jobs support scheme
The Government will directly support the employees who are in work. It will only support viable jobs, employees must work at least 1/3 of their normal hours, the government will cover 2/3 of their hours meaning that the employee will keep their job. The scheme will run for six months starting in November 2020.
1/ Bounce Back Loans have given over a million small businesses a £38 billion boost to survive this pandemic.
To give those businesses more time and greater flexibility to repay their loans, we’re introducing ??? ?? ??? ????. pic.twitter.com/lgYnL0dMe5
— Rishi Sunak (@RishiSunak) September 24, 2020
Statutory Self employment scheme extended
More information to follow on this as Sunak did not provide the detail about this during his speech.
Job Support Scheme
The Job Support Scheme (JSS) is designed to give business the ability to retain staff working reduced hours, rather than make them redundant. Employees will only be eligible for the scheme if they are working at least 33% of their usual hours.
The employer will be required to pay the employee for the hours worked. For the hours not worked the employer must pay one-third of the equivalent salary, the Government will then pay another third. The Government’s contribution will be reimbursed to the employer in arrears and will be capped at £697.92 per month.
The JSS will be open to all employers, with large employers having to prove that they have been adversely affected (among other criteria, the Government expects that larger employers who are claiming will not issue dividends while using the scheme). The Scheme will run for six months from the 1 November.
SEISS Grant Extension
There will be an extension of the Self-Employed Income Support Scheme (SEISS) which the Government had introduced to support self-employed individuals through the initial lockdown measures. The new grants will only be available to those self-employed who have been previously eligible and who continue to experience reduced demand due to COVID-19.
There will be two grants. The first will be for the period start November 2020 to end January 2021. This grant will be for 20% of average monthly trading profits and will be capped at £1,875. The second grant will be for the period start February 2021 to end April 2021. The value of this grant has not yet been determined by Government. We will provide you with more information as it becomes available.
VAT Reduction Extended
The special 5% VAT rate for hospitality and tourism (including supplies of food and non-alcoholic drinks) will continue to apply to 31 March 2021.
Pay as you Grow
Loans taken under the Bounce Back Loan Scheme (BBLS) can now be repaid over a period of ten years. Customers will also be able to pause repayments for a period of up to six-months. This ‘pause’ is available once during the loan’s lifetime and can only be used once at least six payments have been made. The loan can also be moved to an interest-only repayment for a period of up to six-months. Interest-only periods can be applied for up to three times over the course of the loan’s lifetime.
Loan Scheme Extension
The BBLS, Coronavirus Business Interruption Laon Scheme (CBILS), Coronavirus Large Business Interruption Loan Scheme (CLBILS) and Future Fund will remain open until 22 March 2021.
VAT Deferral
Those business which deferred their VAT payment due in March to June 2020, will have the option to spread the payment over the financial year 2021-22.
Self-Assessment – Enhanced Time to Pay
Taxpayers with up to £30,000 in self-assessment tax liabilities due in January 2021 will be able to use HMRC’s self-service Time to Pay facility to secure a plan to pay their liability over 12-months.