Coronavirus Support Measures

Today in the Commons, the Chancellor, Rishi Sunak, has announced new measures to support businesses and their employees. The headlines are:

The furlough scheme is ending on 31st October. It will be replaced by a new Job Support Scheme.

This new Job Support Scheme will top up wages of any employee who was on the payroll on 23rd September 2020, covering up to 2/3rds of their hours for the next six months

• Employees must work a minimum of 33% of their hours.
• For remaining hours not worked, the government and employer pay 1/3 each.
• So employees working 33% of their hours will receive at least 77% of their pay.
• The employer must pay the employer's NI and pension contributions.
• All small and medium-sized companies can use the scheme. Large business will be required to show that their businesses have been adversely affected,

Similar terms will be available for the self-employed through a third SEISS grant that will cover 20% of average monthly profits for three months, for those eligible for the first and second SEISS grants. This is capped at £1875. A fourth SEISS grant will cover the period from February to April.

Businesses that took government guaranteed loans during the crisis will be able to make repayments over ten years – up for the previous limit of 6 years - under a new "pay as you grow" scheme. The Chancellor has also announced an extension to 10 years for Coronavirus Business Interruption Loans. A new loan scheme will be introduced in January.

Individual taxpayers, with taxes due to be paid by 31st January 2021, will be able to apply to be able to spread them over 12 monthly instalments up to January 2022. 

There will no longer be a requirement for a lump sum repayment at the end of March 2021, for business who deferred their VAT. They will be able to split it over 11 months of interest free payments.

Also on VAT, the proposed reversion to 20% VAT for hospitality and tourism has been postponed, with the 5% rate remaining in place until 31st March 2021.

Stay up to date with the latest changes in finance and accounting with the AAT Accelerated Pathway: Technical Update 2020-21, developed in commercial partnership with AAT.