We were expecting a Budget in the coming weeks but that has been abandoned for the moment and instead the Chancellor stood up in Parliament last week to announce his "Winter Economy Plan". Many commentators expected him to announce some kind of replacement for the Job Retention Scheme (furlough) but he went quite a bit further.
The Job Support Scheme will provide grants to employers for those employees they can keep on reduced hours as long as these represent at least 33% of their normal hours. From 1 November, eligible employees will be paid as normal for actual hours then paid 2/3 of normal pay for the rest of their normal hours with half of that paid by the employer and half by the government. For an employee working the minimum 33% of normal hours, they will receive around 77% of normal pay with the employer paying 55% and the government 22%. The grant is capped at £697.92 per month for each employee on the scheme and will last 6 months.
There will also be an extension to the scheme supporting the self-employed. Self-employed individuals who are facing reduced demand over the winter months will be able to apply for a grant of 20% of their average monthly trading profits for three months from November to January. The scheme will continue for a further 3 months but the amount of grant has not been confirmed.
The Chancellor also announced schemes to allow instalment payments for VAT held over from earlier this year and for personal tax payments due in July 2020 and January 2021. He also extended the period of reduced VAT for the hospitality and tourism sectors until the end of March 2021 and improved the terms and guarantees for the business loan schemes.
Full details of all these changes will be provided in the coming weeks and we will include further information on these pages when they become available.
