The Chancellor, Rishi Sunak’s, Winter Economy Plan – What business support is available?

Key updates

• On September 24, Rishi Sunak addressed the nation with new methods of support the government is providing businesses and individuals. 
• On October 9, the Chancellor outlined the next stage of the Winter Economy Plan.
  
• On October 22, the Chancellor increased financial support for businesses and workers. This included an increased contribution to wage costs under the Job Support Scheme for open businesses, as well as an increase in the amount of profits covered by the two forthcoming self-employed grants.
• On October 31, the government postponed the Jobs Support Scheme which will now launch in December when the extended Job Retention Scheme closes. 
• On November 2, the government further extended the loan scheme application deadlines while also increasing the value of the self-employed grant.
  
  
• On November 5, the Chancellor extended the Job Retention Scheme until 31 March 2021 and therefore guidance on the Jobs Support Scheme has been withdrawn. In addition, the government has announced that the value of the next self-employed income support grant will increase from 55% to 80% of average profits.

Key points of the two stages of the Plan announced include:

Winter Economy Plan - Stage 2

1) Employment support 

Jobs Support Scheme (JSS) closed – for businesses legally required to close.

The Jobs Support Scheme has been postponed as the Job Retention Scheme has been extended until March 31 2021.

The Jobs Support Scheme will be expanded to include businesses across the UK required to close their premises due to coronavirus restrictions providing grants to pay the wages of staff who cannot work. This will include premises restricted to delivery or collection only services from their premises and those restricted to provision of food and/ or drink outdoors.

The scheme will begin in December.

Key information

• The government will be covering two thirds of each employee’s salary which will be capped at £2,083.33 per month.
• Employers will not be required to contribute towards wages, but will have to cover employer National Insurance and pension contributions
• Employees will earn 67% (two thirds) of their normal wages
• Employees will be required to be off work for a minimum of seven consecutive days.
• Payments will be made monthly in arrears through a HMRC claims service

Eligibility

• The scheme is open to all business premises legally required to close as part of local or national restrictions. This includes businesses instructed to operate on a collection only or delivery only basis.
• Employees must be employed and an RTI submission notifying payment in respect of that employee to HMRC must have been made on or before 23 September.

Further details will become available through the government website. 

2) Grant support 

A summary of the different grants available for businesses affected by coronavirus restrictions is available through our guide, here.  

Winter Economy Plan – Stage 1 

1) Employment support 

Jobs Support Scheme (JSS) open - for business that can remain open but may be facing low demand over the winter months

The Jobs Support Scheme has been postponed as the Job Retention Scheme has been extended until March 31 2021.

Introduction of a 6-month wage subsidy scheme which will starts from December, to encourage businesses affected by Covid-19 to keep people on short-term hours, rather than making them redundant. 

Key information 

• Employees must be working a minimum of 20% of their usual hours (decreased from the original 33% set out in September). This temporary working agreement must cover at least seven consecutive days.
  
• Employees will be able to cycle on and off the scheme and do not have to be working the same pattern each month, but each short-time working arrangement must cover a minimum period of seven days.
• For every hour not worked, the government will pay 61.67% of the employee’s usual pay and the employer 5% (decreased from the original 33% set out in September). This means that for time not worked, the employee will be paid up to two-thirds of their usual wage.
• The level of grant will be calculated based on employee’s usual salary, and the government contribution will be capped at £1541.75 per month.
• Employers will be reimbursed in arrears for the government contribution. 
• Employees must not be on a redundancy notice. 
• Businesses can benefit from both the Jobs Support Scheme and the Job Retention Bonus  
    

Eligibility 

The scheme is open to: 

• All employers with a UK bank account and a UK PAYE scheme. 
• All Small and Medium-Sized Enterprises (SMEs). 
• Large businesses. However, these will be required to demonstrate that their business has been adversely affected by COVID-19, and the government expects that large employers will not be making capital distributions (such as dividends), while using the scheme. 
• Businesses across the UK even if they have not previously used the furlough scheme. 
• Employees must be on an employer’s PAYE payroll on or before 23 September 2020.

Further details will become available through the government website. 

Self-Employment Income Support Scheme (SEISS) Grant Extension 

• The scheme extension will include two taxable grants and will last for 6 months from November 2020 to April 2021. 
• The first grant will cover a three-month period from the start of November until the end of January. This will cover 80% of average monthly trading profits, paid out in a single instalment covering 3 months’ worth of profits up to £7,500 in total. 
• The second grant will cover the period from February 2021 to the end of April and its value will be announced by the government in due course. 

Eligibility

To be eligible for the scheme, individuals must:

• currently be eligible for the SEISS (although they do not have to have claimed the previous grants)
• declare that they intend to continue to trade and either:
  • are currently actively trading but are impacted by reduced demand due to coronavirus
  • were previously trading but are temporarily unable to do so due to coronavirus

The online service to claim the next grant will be available from 30 November 2020.

More information is available through our dedicated page. 

2) Extension of access to finance schemes 

The government is extending the deadline for new applications for the four temporary loan schemes launched to support businesses during the coronavirus pandemic to 31 January 2021. 

The four loan schemes include: the Coronavirus Business Interruption Loan Scheme, the Coronavirus Large Business Interruption Loan Scheme, the Bounce Back Loan Scheme and the Future Fund. 

In addition, the government has introduced the measures below: 

Bounce Back Loans  

Introduction of the Pay as you Grow scheme to provide businesses with a flexible repayment system. This means: 

• Loans can now be extended from six to ten years – nearly halving the average monthly repayment. 
• Businesses who are struggling can now choose to make interest-only payments for periods of up to 6 months. 
• Anyone in real trouble can apply to suspend repayments altogether for up to six months (an option they can use once and only after having made six payments). 

No business taking up Pay As You Grow will see their credit rating affected. 

Coronavirus Business Interuption Loan Scheme (CBILS)

• Providing additional repayment flexibility by extending the length of loans from a maximum of six years to ten years. 
  

COVID-19 Corporate Financing Facility (CCFF)

• CCFF will remain open until 22 March 2021. 
   

3) Tax cuts and deferrals 
 

Extension of the cut in the VAT rate to 5% until March 31 2021 for the tourism and hospitality sectors

• This will continue to apply to supplies of food and non-alcoholic drinks from restaurants, pubs, bars, cafés and similar premises, supplies of accommodation and admission to attractions across the UK.

VAT deferral "New Payment Scheme"

• Businesses which deferred VAT due in March to June 2020 will be able to spread out their VAT bill over eleven smaller interest-free payments during the 2021-22 financial year. To take advantage of the scheme, businesses will need to opt-in. The opt-in process will be set up by HMRC in early 2021.

Enhanced Time to Pay for Self-Assessment taxpayers 

• Taxpayers with up to £30,000 of Self-Assessment liabilities will be able to benefit from an additional 12-month extension from HMRC on the “Time to Pay” self-service facility. This means that payments deferred from July 2020, and those due in January 2021, will now not need to be paid in full until January 2022. 

To review the full Winter Economy Plan, see here.  

More information is available on the UK Government’s Coronavirus Business Support website. For more personalised advice call us on: 0161 237 4128 or email us at: BGH@growthco.uk 

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