24 Sep Rishi’s ‘Job support’ and ‘Pay as you grow’ Scheme
Today Rishi announced further financial help for businesses for the coming winter months.
Job support scheme
The existing employee furlough scheme finishes at the end of October 2020. The ‘Job Support Scheme’ will commence on 1 November 2020 and is aimed at supporting sustainable employment, not funding jobs which are no longer viable.
An example of how the scheme will work:
- Employees work a minimum of 1/3 of their hours
- For remaining hours the government and employer will pay 1/3 of the wages each
- An employee would receive 77% of their normal pay with the government paying 22% and the employer 55%
The scheme is aimed at allowing businesses to keep employees in employment on shorter hours rather than making redundancies.
Further details will be announced on the scheme in the coming weeks as to which employers are eligible and other restrictions if an employer participates in the scheme. The eligibility criteria sounds like it will be more stringent than the blanket approach of the furlough scheme – only businesses that can prove they’ve been adversely affected by Covid will be eligible.
Pay as you grow scheme
Details of this scheme include:
- Businesses will be able to repay bounce back loans over a period of up to 10 years rather than 5. There will also be opportunity to have interest only periods if the business is in difficulty
- The application deadline for all coronavirus loan schemes – including the future fund – has been extended to 30 November ensuring even more businesses can benefit from government-backed support
- Businesses who deferred their VAT will no longer have to pay a lump sum at the end of March next year. They will have the option of splitting it into smaller, interest free payments over the course of 11 months – benefitting up to half a million businesses
- Self-employed income taxpayers who need extra help, can also now extend their outstanding tax bill over 12 months from January
- The Self-Employment Income Support Scheme extension will support viable traders who are facing reduced demand over the winter months, covering 20 per cent of average monthly trading profits via a government grant until 30 April 2021
- The reduced VAT rate of 5 per cent for hospitality and tourism will continue until March 31 2021