Following Rishi Sunak’s Winter Economy plan latest announcement here are the current changes:
1.Furlough scheme confirmed to end on 31st October
2. A new Job support scheme will replace furlough scheme on 1st November and will last 6 months
- This will see workers get three quarters of their normal salary
- Workers must do at least one third of their normal hours
- Employers pay staff for the hours they work
- The government and employer will each pay a one third for the hours they cannot work
- Therefore someone working one third of their hours will receive 77% of their pay
- The grant is capped at £697.92 per month
- The grant will not cover Class 1 employer NICs or pension contributions, although these contributions will remain payable by the employer.
- Employees will be able to cycle on and off the scheme and do not have to be working the same pattern each month, but each short-time working arrangement must cover a minimum period of seven days.
- It will be open to employers across the UK even if they have not previously used the furlough scheme
- It means the government will pay a maximum of 22% of someone’s wages, down from 80% at the start of the furlough policy
- More information can be found on the HMRC factsheet at HMRC JSS Factsheet
3.The chancellor is extending the self-employed grant on similar terms to the Job Support Scheme
- A grant will be available to those eligible for the Self Employment Income Support Scheme Grant
- The grant will cover three months’ worth of profits for the period from November to the end of January
- It will cover 20% of average monthly profits up to a total of £1,875
- A further grant may be available to the self-employed to cover February 2021 to the end of April, depending on circumstances
- The grants are subject to Income Tax and National Insurance Contributions.
4.Bounce Back Loans will be extended from six years to 10, cutting monthly repayments by nearly half
- Coronavirus Business Interruption Loan Scheme lenders will also be able to extend the length of loans from the current maximum of six years to 10 years
- The chancellor is also extending the deadline for the government’s coronavirus loan schemes to the end of November
- Businesses struggling can choose to make interest only payments for six months and those “in real trouble” can apply to suspend repayments altogether for six months
- Businesses will not see their credit rating fall as a result, the chancellor says
5.The 15% emergency VAT cut for the tourism and hospitality industries will be extended from January 2021 to 31 March.
- This means VAT for this sector is reduced from 20% down to 5%
- Businesses who deferred their VAT bills will be able to pay back their taxes in 11 smaller interest-free 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.
6.Self-assessment income taxpayers who need to will be given more time to pay
- 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.
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