Chancellor Rishi Sunak has today unveiled his “Winter Economy Plan” in response to the continued economic uncertainty resulting from the ongoing COVID-19 crisis.
We have summarised the main points from his statement:
- A Job Support Scheme, to run for a period of 6 months, will be introduced to support jobs that remain viable within small and medium sized businesses:
- To be eligible, employees must work a minimum of one third of their normal working hours, which will be paid for by their employer
- The government and employer will each pay one third of the wages for the hours not worked
- The Self Employed Income Support Scheme will be extended until 30 April 2021 to cover 20% of average monthly trading profits by means of a government grant
- The application deadline for government coronavirus support loans, such as the Future Fund Scheme, Bounce Back Loans and Business Interruption Loans will be extended until 30 November 2020
- More repayment time and flexibility will be offered to businesses who have taken Bounce Back Loans enabling them to extend repayments from 6 to 10 years or if they are “in real trouble” move to interest only or even suspend payments for up to 6 months
- The government guarantee on Business Interruption Loans will be extended to 10 years
- Businesses who have deferred VAT under COVID support measures will no longer be required to repay a lump sum at the end of March 2021, but instead will be able to spread re-payments, interest free, over the course of 11 months
- The cut in VAT from 20% to 5% for the hospitality and tourism sectors, announced in the Summer Economic Statement will be extended until 31 March 2021. This covers food from restaurants, cafes and pubs, accommodation in hotels, B&Bs and caravan sites, and attractions such as cinemas, theme parks and zoos.