The Chancellor has announced a new 6 month Job Support Scheme to help businesses and employees survive the winter months. We are still awaiting full details of the scheme that will replace the current “flexible furlough” scheme but the main features are as follows:-
Employers of all sizes will be eligible for the new scheme but large organisations will need to demonstrate that their turnover is reduced as a result of COVID-19.
Eligible employees will be those on the PAYE payroll at 23 September 2020 that are working for at least 33% of their usual hours.
The employee will be entitled to 2/3 of their usual pay for hours not worked and the Government will pay a grant of 1/3 of usual pay for hours not worked. The maximum grant will be £687.92 a month.
For example an employee whose usual pay is £450 a week who works 2 days a week would be paid £180 for the 2 days worked and £180 for the other 3 days. The employer could claim a grant of £90 from the Government.
Other measures announced by the Chancellor
In addition to the Job Support Scheme the Chancellor announced that the Self-Employed Income Scheme would also be extended for a further 3 months but the grant will be 20% of average monthly profits capped at £1,875.
The temporary 5% rate of VAT for the hospitality sector, accommodation and attractions will be extended to 31 March 2021.
Businesses that have deferred their VAT payments will be able to pay back the deferred amount over 11 months.
The “Bounce-back” and CBILS loans can be repaid over 10 years instead of 6 years.