Winter Economy Plan

After what has been a relatively quiet couple of months in terms of Covid 19 announcements from a finance perspective,  following the tightening of social guidelines in response to a recent uplift in cases the Chancellor has today outlined a further raft of measures as part of his ‘Winter Economy Plan’.

As with previous announcements, we await greater detail and will provide this in full when we have it, but in summary the measures announced today include:

Job Support Scheme

Due to start from 1 November (i.e. the day after the furlough scheme ends), the Job Support Scheme is intended to support those whose normal working hours are adversely affected by the ongoing Covid situation and is currently expected to last for 6 months (to the end of April 2021).

Provided an employee works at least 33% of their usual hours, the government and employer then pay 33% each of the pay foregone as a result of the reduction (subject to a government cap of £697.92 per month).

Therefore an employee that works 33% of their normal hours in a month would receive 77% of their normal wages for that month, an employee that worked 50% of their normal hours in a month would receive 83% and so on.

Like the furlough scheme, the employer will make a claim for the contribution which will be paid in arrears and eligible employees must not be on any form of redundancy notice – we expect a claim process similar to that for the furlough scheme and will confirm details when we have them.

Use of this scheme will not affect the ability to claim the job retention bonus for furloughed employees retained beyond January 2021.

SEISS Grant Extension

Like the Job Support Scheme, this measure is intended to extend support to the self employed impacted by Covid for an extended period covering November to April and will come in the way of two taxable grants.

The first will cover November to January covering 20% of three months’ worth of average monthly profits over the 2018, 2019 and 2020 tax years up to a maximum grant of £1,875.

The second will cover February to April, with the amount available to be determined and announced by the government at a later date.

The application process is expected to be the same as that for the previous versions of this scheme.

Pay As You Grow

All businesses that borrowed under the Bounce Back Scheme will now have the following options available to them:

• Extension of repayment term up to 10 years
• Revert to interest-only repayments for a 6-month period up to three times over the life of the loan
• A repayment pause for a 6-month period (only available once and only when at least 6 repayments have been made)

The application window for Bounce Back Loans will also be extended to the end of 2020, with a successor to the scheme expected to be announced soon.

CBILS Loan Extension

All businesses that borrowed under the CBILS scheme will have the option to extend the repayment term up to 10 years.

The application window for CBILS loans will also be extended to the end of 2020.

VAT Deferral ‘New Payment Scheme’

Those who deferred their VAT payments for the March – June period in 2020 will have the option to spread the payment of this over the 2021/22 financial year (to March 2022) in 11 equal instalments.

All businesses that took advantage of the automatic deferral are eligible but, unlike the deferral scheme itself, will need to opt into the New Payment Scheme to spread the payments.

Enhanced Self Assessment ‘Time to Pay’

This measure builds on the July payment on account deferral scheme, but gives taxpayers with a liability of up to £30,000 due by 31 January 2021 the option to agree a 12 month payment plan with HMRC via their ‘Time to Pay’ service.

Those with tax liabilities at 31 January in excess of £30,000 can still agree payment plans with HMRC via this services, however there is no obligation for HMRC to match the terms noted above for those below the £30k threshold. 

If you have any questions regarding this or anything else please get in touch, and for regular updates, announcements and news please check our website (www.dsaprospect.co.uk) and make sure you’re following our LinkedIn page: https://www.linkedin.com/company/dsa-prospect-ltd