Coronavirus Support Update: Winter 2020

Tuesday September 29, 2020

There have been a number of pretty big moves from Chancellor Rushi Sunak over the last 6 months or so, but many of them came with expiry dates attached. As of the 31^st of October, for instance, the Coronavirus Job Retention Scheme is grinding to a halt. To be fair, we always knew this was coming.

The scheme’s been tapering off for a while and no one was pretending it would last forever. Now, in place of the CJRS furlough rules, we’ll have a new Job Support Scheme. It’s a tighter, more strictly focused system, designed specifically to support employers putting people back to work on reduced hours.

Here are the basics:

• If your business is offering workers at least a third of their normal hours, they qualify for the Job Support Scheme.
• You continue to pay them normally for the reduced hours they work.
• For the hours that have been cut, the difference gets split between you, your employee and the government. Your business and the government each pay the employee a third of the money they would have earned if they’d worked their full hours. The employee is still losing a third of their pay for those missing hours, but the blow is significantly cushioned.

The Job Support Scheme might be the biggest headline-grabber of the new rules coming in, but there’s still a lot more help currently on the table – particularly for smaller businesses. Here’s a quick breakdown:

• Firms that already took out “bounce back loans”, or which take them out before the end of November, will now have 10 years to repay them instead of 6. On top of that, payment holidays and alternate arrangements like interest-only plans are available.
• The VAT reduction of 5% for the hospitality sector has been extended to the 31^st of March 2021. Previously, it’d been set to rocket back up to 20% on the 12^th of January next year.
• There’s a new payment scheme for businesses that delayed their VAT payments. Now, instead of the old deadline of March 2021 for settling up in full, they’ll be able to make payments over a longer period throughout 2021/22.

As for self-employed people, another 2 rounds of the Self-Employment Income Support Scheme have been announced. The amounts on offer are going down, though, as expected.

The upcoming third grant will only cover 20% of average profits from November 2020 through to January 2021, with a cap of £1.875. Beyond that, a fourth grant will be available to see you through from February to April 2021 – although no specific details have been announced just yet.

For people struggling with their Self Assessment tax bills, the deadlines have been relaxed a bit as well. People having trouble making their January 31^st 2021 payments will now be able to defer them for an additional 12 months, to January 2022.

With the pandemic still wreaking havoc across the UK economy, none of these measures is expected to save every business – or even every individual job. However, they could still be a lifeline for many. There are more details to come on some of them in the coming days and weeks - so keep safe, keep yourself healthy and keep checking back for more Voices from the RIFT...