Rishi Sunak the Chancellor has just announced new measures to help Self Employed and Small to Medium sized businesses.
The actual detail will be published shortly, and we will update when we receive it.
The chancellor has announced the following.
CJRS ( Job Retention Scheme)
The Job retention scheme ends in October, however today, Rishi has announced that this will be replaced by a Jobs Support Scheme.
Employees who's usual hours have been reduced, will see the Employer and Government top up their wages. You must work at least 1/3rd of your usual hours to be eligible, the Employer and the Government will top up your pay by 2/3rds.
All small and medium sized businesses are eligible, larger businesses will only be eligible if their turnover reduces. (The detail on what the reduction on turnover should be, will be announced shortly)
The Self Employed is also included in the new Jobs Support Scheme.
The extension will be in the form of two taxable grants. The first grant will cover a three-month period from the start of November until the end of January.
This initial grant will cover 20%of average monthly trading profits, paid out in a single instalment covering 3 months’ worth of profits, and capped at £1,875 in total. The second grant will cover a three-month period from the start of February until the end of April.
The government will review the level of the second grant and set this in due course.
Length of time
The length of time the new Jobs Support Scheme will run for, will be six months, starting from 1st November.
The new Job Support Scheme, will not affect any Job Retention bonus employers will receive around late January.
Any employer claiming the Job Support Scheme can not make any employee they are claiming for, redundant during the period of claim.
Bounce Back Loans
The Chancellor has announced that the Bounce Back Loans, can be extended from 6 years to 10 years in order to further spread the cost of repayments. Businesses will also have the option to make interest only payments, or suspend payments for six months.
None of these extensions or payment suspensions will affect any Credit Ratings.
CBILS (Coronavirus Business Interruption Loan Scheme)
Government backed guarantee will be extended up to 10 years.
All loan applications have been extended up to the end of December 2020.
VAT Payments which were originally deferred up to March 2021, has now been given the option to spread the payment over 11 smaller payments, meaning any VAT bill which was deferred until March 2021 can now be repaid over a further 11 months.
Self Employed January 31st Income Tax Payments
The Chancellor has announced that all Self Employed individuals or Partnerships can now extend their January 31st tax bill for a further 12 months. Its unclear at this time, the detail, but it is likely to be similar to the VAT deferral whereby Income Tax payers can split their January 31st Tax bill over the following 12 months in 12 monthly instalments.
Hospitality and Retail VAT reduction from 20% to 5%
The reduction in VAT from 20% to 5% has been extended until March 31st 2021.
As and when the detail for all the above is published, we will update our website.