Rishi Sunak has just announced further coronavirus support scheme measures. Whilst we will be looking for details to share with our clients in the coming days, the headline points per his speech were as follows.
Job Support Scheme
This will start in November when the current furlough scheme ends and is expected to run for six months. This scheme will apply where an employee is working a minimum of 33% of their normal hours but not working their full hours. Of the shortfall, the employer must top up 1/3 and the government will fund 1/3. For an employee with the minimum hours, this means they will get 77% of their normal full pay (33% for hours worked. 22% employer top-up. 22% government funding).
Small to medium enterprises will be automatically eligible. Larger businesses will have to prove adverse effects from the coronavirus.Eligibility will not require an employer to have used the furlough scheme.
While he did not go into detail of amounts claimable or the dates it will be available for, the Chancellor did announce this scheme will also be extended. The new scheme is to be offered on “similar terms” to the previous scheme.
Loans taken under the Bounce-back or Coronavirus Business Interruption schemes are to have extended pay periods, described as “pay as you grow”. It will be possible to extend the loans from 6 to 10 year repayment terms, reducing the monthly repayments. Businesses will also be able to apply to make only interest payments, or suspend payments entirely, for six months if they are “in real trouble”. Taking advantage of either of these should not be factored into a business’ credit rating.
Businesses that took advantage of the VAT deferral earlier this year will no longer have to pay the entire amount in March 2021. Instead, they may opt to spread the payment of the deferred liability over 11 months interest-free.
The reduced rate of 5% for hospitality and tourist businesses is to continue until 31 March 2021 instead of ending on 31 January 2021.
Similarly to the VAT scheme, anyone who deferred their July tax payment will be able to spread that over 11 months.
The above information is based on the Chancellor’s speech. Further detail on all these schemes is expected to be released in the near future. This is likely to include strict eligibility criteria that may affect who can take advantage of them. We will monitor developments on behalf of our clients and share further information as it becomes available.