Coming into the final quarter of 2020, the UK Government has introduced new and improved business support packages known as the Winter Economy Plan.
We understand that it’s a lot of information to take in. However, these changes will impact most businesses and employees. So, we’ve broken down the most vital information that as a business owner you should be aware of going into winter.
Job Retention Scheme
October is the last month of the Job Retention Scheme (JRS). However, it is changing this month (again!).
The new plan will look something like this:
For hours not worked the employee is paid 80% on furlough. However, the employer can only claim back 60% of the furlough pay. They are also responsible for any employers NI and employers pension contributions.
For example, if your employee's gross pay was £1,000 per month then they would need to be paid £800 on furlough. As the employer, you would only be able to claim back £600 from the Government.
Job Support Scheme
From the 1st of November, there will be the Job Support Scheme. Full details of what this entails are not yet available. However, the main points are that the employee must be working a minimum of 33% of their usual hours. Of the other 66%, the employer must pay 22% and the government will pay 22%.
In summary, the employee would get up to 77% of their usual pay with 55% of this being paid by the employer.
Job Retention Bonus Scheme
Employers using the furlough/job support scheme will be able to claim the coronavirus job retention bonus scheme if the employees are still in employment at the end of January. This will be a total of £1,000 per employee.
Please be aware, if you are thinking of making employees redundant or using the Job Support Scheme, then employment law must be adhered too. We highly recommend crunching the numbers to get a clear idea of the cost to the business of either making people redundant or keeping them on.
Self-Employed Income Support Scheme
The Self Employed Income Support Scheme (SEISS) will be extended. There will be 2 further claims available for businesses adversely effected from 1st November. The first grant will cover 20% of the average monthly profits for 3 months. It is not clear when the applications for these grants will open, and whether 2020 returns will be taken into account.
Bounce Back and Coronavirus Business Interruption Loan Scheme
Payment terms for Bounce Back and Coronavirus Business Interruption Loan Scheme will be extended to 10 years. They will also offer borrowers a more flexible repayment schedule
VAT and self-assessment that were deferred can now be spread over 12 months. If the debt is under £30,000 you can apply for the payment plan online once available. If the amount owed is over £30,000 you will need to use the telephone service.
VAT in the Hospitality & Tourism Industry
5% VAT for the hospitality and tourism sector has been extended to 31 March 2021.
The final main change that we will see in the Winter Economy Plan is the Kickstart Scheme. This is where the Government pays 25 hours a week of work placement for young people between 16 and 24. To apply directly, the original scheme required a minimum of 30 participants per business. However, support is in place with Adecco Work Ventures to assist small businesses in applying without the 30 minimum. This scheme can now be accessed through the Federation of Small Business (if you are a member). Find out more via the link below.
Hopefully, we’ve shed some light on what the Government’s plans are for the next few months and how it will impact you and your business. For more information access the full Government Winter Economy Plan here.
As always, our friendly services are available if you’d like to enquire about tailored support. Find out more about what areas we can assist you with via our services page as well as our online services.