Changes to Business Support Packages

Yesterday the Chancellor announced new measures to help further contain the economic impact of Covid-19. We’ve rounded up some of the key points for you.

Job Support Scheme

In replacement of the Job Retention or ‘Furlough’ Scheme, the government announced that they will directly support the wages of individuals in ‘viable’ jobs by introduction of the Job Support Scheme (JSS). Under the scheme, which starts on 1st November 2020 and will run for 6 months, those who are working a minimum of a third of their usual working hours will be paid for all those hours. The remainder of their normal contracted hours, if the full contracted hours cannot be offered, will then be split into thirds, one third being met by the government, a third by the employer and the remaining third being lost by the employee. This means that employees will receive a minimum of 77% of their ‘normal salary. During this period it will not be possible for employers to issue redundancy notices to employees or make employees redundant whilst taking advantage of the JSS. 

JSS is also, importantly, open to all employees, not just those affected by the previous furlough scheme.

Self Employed Income Support Scheme

For those who are Self Employed and have been trading during the Pandemic but have been adversely affected by reduced demand, the Chancellor also announced an extension to the Self Employed Income Support Scheme (SEISS).

Those who are eligible will be able to apply for a taxable grant that will cover three months of profits for the period of November to the end of January 2021. It is worth 20% of your average monthly profits and is capped at £1,875.

A second grant will then be available to cover the period of February 2021 to the end of April 2021.

Pay as You Grow

For businesses that took out a Bounce Back Loan, Government is offering the option to extend the payback time from 6 to 10 years, thus almost halving the repayment amounts. For those businesses struggling to meet these repayments, there will be an option to pay the loan interest only, once this becomes payable, or suspending payments altogether, for a period of up to 6 months.

Deferred VAT Payments

Those businesses who chose to defer their VAT liability due in March – June 2020 will not have the option to spread the payment over 11 monthly instalments over 2021-2022 in an attempt to further ease business cashflow. Businesses will need to opt-in to this ‘New Payment Service’ but it is expected to be live in early 2021.

Think Formations can help you with all aspects of Business Management, from Company set up to banking, accounts, VAT and PAYE, Virtual Office Services and business mentoring.