The Chancellor has announced the next phase of the UK’s economic plan as it continues in its response to the pandemic.
Today, the Chancellor launched the Winter Economy Plan, which is ultimately about protecting people’s jobs, as it is expected that the virus and the restrictions we now follow will be a fact of life for everyone for at least 6 months.
From November, a new Job Support Scheme launches which will which replace the Furlough Scheme and see the Government directly supporting the wages of people in work, giving businesses the option to keep employees in jobs on shorter hours rather than making them redundant. The Job Support Scheme will be based on 3 principles:
- The jobs must be viable jobs where the employee must work at least one third of their normal hours and be paid as normal by their employer. The Government and Employer will then pay between them the hours not worked, each paying one third.
- The scheme will be targeting those businesses which need it the most. It will be open to all SME’s but for larger organisations they will be eligible only when their turnover has fallen (levels still to be communicated)
- It will be open to all employers, even those who did not utilise the Coronavirus Job Retention Scheme (Furlough).
The scheme will be in place for 6 months and those employers who can claim the Job Retention Bonus, which is due to be paid in the Spring 2021, will also be eligible for this new Job Support Scheme.
Further details of this scheme are yet to be published, and Business HR Solutions will bring further updates as we know more.
Other Financial Support Measures
The Government have announced that they will extend the self-employed grant on similar terms and conditions.
They will also continue to further help businesses with cash flow through the following measures:
- The Bounce back loans will give employers more time to repay through the introduction of “Pay as You Grow” which will allow for loans to be extended from 6-10 years. Employers will also be able to choose to pay interest only as well as apply to suspend payments up to 6 months with their credit rating not being affected.
- With regards to the Coronavirus business interruption loan they will extend the guarantee for up to 10 years allowing more time to repay.
- The deadline to apply for all loan schemes will be extended to the end of 2020.
- A new succession loan plan will start from January 2021.
- Businesses will be given more time to pay their tax bill and will be able to spread their VAT bill over 11 smaller payments with no interest to pay. Those who need extra help can extend outstanding tax bills for 12 months from Jan 2021.
- To support the hospitality and tourism sector, the VAT rate of 5% which was due to revert will be extended until 31 March 2021.
As with the Job Support Scheme, we await the finer detail regarding these further support measures.
Further HR Support
HR Solutions are here to provide you with support and advice on any employment related issues. Find out more by calling us on 0844 324 5840 or contact us online.