Chancellor Rishi Sunak has announced further measures to support businesses covering three main areas:
- A new job support scheme (to replace the furlough scheme)
- Extended terms on Bounce Back and CBIL loans
- Extended repayments terms on deferred VAT bills
The new Job Support Scheme means that for six months from 1 November the Government will top up the wages of those workers on reduced hours. Employees must work at least 33% of their regular hours, for the remaining hours not worked, the Government and employer will pay a third of their wages each. An employee working 33% of their normal hours will receive 77% of their normal pay. The level of grant will be calculated based on the employee’s usual salary, capped at £697.92 per month.
Repayment terms on Bounce Back and CBILS loans can now be extended from six to ten years and there is the option to switch to interest-only payments or suspend payments for up to six months for businesses who are really struggling. The current loan schemes will now remain open until the end of the year, with a new loan scheme introduced in January.
VAT bills deferred to March 2021 will no longer need to be paid in full on the date. Repayments can be made over 11 months, however, these payments will still need to be made.
If you owe tax of up to £30,000 you will be able to set up a payment plan over 12 months to January 2022.
The planned increase of VAT from 5% to 20% for hospitality and tourism businesses, which was due to come into effect in January has been delayed until 31 March next year.
If you would like assistance with any of the above, please contact a member of our team on [email protected] The calculations for the new Job Support Scheme are not easy to understand, and our dedicated Payroll Team are always happy to help.