COVID-19: New Financial Support Announced Today
The Chancellor has today announced a further package of financial support measures intended to protect jobs and support businesses.
Outlined below is a summary of the key new measures, but this is not the formal Government statement. Once the details have been revealed we shall provide further information.
New Job Support Scheme Announced by the Chancellor
Below is a summary of the key points announced today by the Chancellor.
- The CJRS (Furlough Scheme) will end on 31 October 2020, as planned
- A new Jobs Support Scheme will come into effect from 1 November 2020, aimed at retaining “viable” jobs and intended to support wages for people in work and to provide employers with the option to introduce short time working, opposed to making redundancies.
- Employees must work at least one-third of their normal hours, which must be paid as normal by their employer, with a further top up of their salary being subsidised by the government. The Chancellor in his announcement stated this top up would equate to two-thirds, but HM Treasury have just tweeted the top up would only be one-third, bringing total salary up to just 77%. We await the official guidance with anticipation!
- All SMEs are eligible and so too are larger businesses whose turnover has fallen.
- The new Scheme will be open to all business throughout the UK, regardless of whether they have previously used the CJRS (Furlough Scheme and will run form 6 months from November.
- Employers participating in the new Jobs Support Scheme will still be able to claim the Jobs Retention Bonus.
- The self-employed grant is being extended on similar terms and conditions to the new Jobs Support Scheme.
Cashflow Assistance Also Announced by the Chancellor
In addition to the new Jobs Support Scheme, the Chancellor also announced four further steps intended to provide cashflow assistance for businesses. The key points are:
- Business Bounce Back Loans can be extended from uptown 6 to 10 years to reduce the monthly repayment amounts that would have otherwise been due and businesses can seek to defer the start of repayments for up to 6 months beyond the current arrangements.
- The government guarantee for Business Interruption Loans will be extended for up to 10 years and the deadline for applying for all loan schemes is being extended to the end of this year.
- Businesses that previously utilised the VAT deferral scheme can now spread the repayment of the deferred VAT bills over 11 months.
- VAT shall remain at 5% for hospitality and tourism business until the end of March 2021.
At the time of writing this the Chancellor is still answering questions from MPs in the House of Commons, so the full details of the various measures he has announced are not yet available.
Once the formal Press Release, guidance and any draft legislation is released, we shall review it thoroughly and provide further updates / clarity.
Support for Employers
The COVID-19 lockdown restrictions and various government schemes being introduced by the UK government continue to present numerous and complex challenges for Employers.
If you are an Employer and require advice and support on any employment matters, COVID related or otherwise, call us now on 0800 612 4772 or Contact us via our website and we will set out clear guidance to assist you to comply with your legal obligations.