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COVID 19: Winter Economy Plan

Winter Economy Plan

Friday, 25th September 2020

On Thursday, 24th September 2020 the Chancellor Rishi Sunak presented the UK Government’s Winter Economy Plan.

This outlines the next stage of economic support offered to small businesses and self-employed individuals impacted by the COVID-19 pandemic

KEY POINTS

1 – The Job Support Scheme

2 – A 3rd grant for the Self Employed

3 – VAT 5% extension

4 – Loan terms extended for Business Loans

5 – Time to Pay facilities

1 – The Job Support Scheme

The current Coronavirus Job Retention Scheme will come to an end on 31st October 2020.

On 1st November 2020 the Job Support Scheme will be its replacement to help save viable jobs and offer genuine security.

  • How will it work?

To be eligible, employees will need to work a minimum of 33% of their usual hours.

Employees must be on an employer’s PAYE payroll on or before 23rd September 2020. This means a Real Time Information (RTI) submission notifying payment to that employee to HMRC must have been made on or before 23rd September 2020.

For every hour not worked, the employer and the Government will each pay one third of the shortfall of the employee’s usual pay, with the Government’s contribution capped at £697.92 per month.

Employees using the scheme will receive at least 77% of their pay, where the Government contribution has not been capped.

The employer will be reimbursed in arrears for the Government contribution.

The employee must not be on a redundancy notice.

  • How long is the scheme open for?

The scheme will run for six months from 1st November 2020 and is open to all employers with a UK bank account and a UK PAYE scheme.

  • Are all Employers Eligible?

All Small and Medium-Sized Enterprises (SMEs) will be eligible for the scheme, as well as larger firms whose turnover has dramatically fallen in recent months.

​Even small firms that did not need to use the original furlough scheme can potentially utilise the Job Support Scheme.

  • Employers also able to claim Job Retention Bonus simultaneously

The Job Support Scheme is designed to work in tandem with the Job Retention Bonus. This bonus could be worth up to 60% of an average furloughed worker’s monthly wage, providing they are kept on until February 2021.

Need help with your payroll, not sure if your business can continue to sustain the current workforce? Contact Onyx now and speak to our dedicated payroll department and to access our HR partners.

2 – A 3rd grant for the Self-Employed Income Support Scheme (SEISS)

The existing Self-Employed Income Support Scheme has been extended until 30th April 2021.

The SEISS will now provide 20% of an individual’s average monthly trading profits in the form of further cash grants.

It will be available to self-employed individuals who have previously qualified for the scheme under existing rules, although they do not need to have made a previous claim, and who are actively continuing to trade but are facing reduced demand as a result of coronavirus.

​The initial grant will cover November 2020 through to January 2021, spanning three months of average monthly trading profits in one instalment – up to a maximum of £1,875 in total.

​The Government has advised an additional second grant will also be available for self-employed individuals to cover the period from February 2021 to 30th April 2021. The amount of support has not yet been confirmed and is subject to revision should economic circumstances change.

Is your business still struggling, not sure if you are eligible to claim the grant? Contact us now and let us review your past self-assessments to ascertain what help is available to you.

3 – VAT 5% extension

The Chancellor has confirmed help for the hospitality and tourism sectors. The reduced VAT rate of 5% will remain in place until 31st March 2021.

The reduced VAT rate 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.

Is your business in the hospitality and leisure industry? Confused about VAT, rates, schemes and spiralling invoice management? Then look no further. At Onyx we have our own dedicated management accounts team who specialise in the day to day processing of management information and will review your VAT to ensure you are on the right scheme and applying the correct rates. Contact us NOW!

4 – Loan terms extended for Business Loans

The Government has confirmed their intention to give lenders the ability to extend the term of the following loans from a maximum of six years to ten years alongside their guarantee for these loans.

The deadline has been extended until 30th November 2020 for new applications for these schemes.

Support also continues through the COVID-19 Corporate Financing Facility which will remain open until 22nd March 2021. Where a company has exhausted all other options, and is of strategic importance to the UK, the government may also consider providing bespoke financial support.

  • Bounce Back Loans (BBL)

​The BBL scheme, which provides between £2,000 and £50,000 in funding to businesses (capped at 25% of turnover) has introduced a new ‘Pay As You Grow’ repayments system. All firms will now be able to repay their loan over ten years instead of six.

​Businesses struggling to keep up with their monthly repayments may opt to move temporarily to interest-only payments for periods of up to six months (an option which they can use up to three times), or to pause their repayments entirely for up to six months (an option they can use once and only after having made six payments).

  • Coronavirus Business Interruption Loan Scheme (CBILS)

The scheme provides loans of up to £5 million with an 80% government guarantee to the lender, giving lenders the confidence to provide finance to SMEs. The government does not charge businesses for this guarantee and also covers the first twelve months of interest payments and fees.

  • Coronavirus Large Business Interruption Loan Scheme (CLBILS)

The CBILS scheme provides loans of up to £200 million (to a maximum of 25% of turnover), with an 80% government guarantee to the lender, which is more generous than equivalent schemes in many other countries.

  • Future Fund

The Future Fund investment scheme for innovative and fast-growing UK-based businesses, will continue to provide these loans which are subject to at least equal matching from private investors. Businesses that have already accessed a Future Fund convertible loan cannot apply for another one.

Is your business still struggling financially to meet the day to day running cost? Have you considered a government supported loan? If you find all this overwhelming and number crunching is not your thing then let Onyx take the hassle and stress away. With our support we can help secure the right loan for you.

5 – Time to Pay facilities

  • VAT Deferral ‘New Payment Scheme’

The option to spread payments for businesses which deferred VAT due in March to June 2020.

Rather than paying in full at the end of March 2021, businesses can choose to make 11 equal interest free instalments over 2021-22.

All businesses which took advantage of the VAT deferral can use the New Payment Scheme. Businesses will need to opt in, but all are eligible.

HMRC will put in place an opt-in process in early 2021.

  • Enhanced Time to Pay for Self-Assessment Taxpayers

Time to pay taxes due in January 2021 is offered to the self-employed and other taxpayers. This builds on the Self-Assessment deferral provided in July 2020.

Taxpayers with up to £30,000 of Self-Assessment liabilities due will be able to use HMRC’s self-service Time to Pay facility to secure a plan to pay over an additional 12 months. This means that Self-Assessment liabilities due in July 2020 will not need to be paid in full until January 2022.

Any Self-Assessment taxpayer not able to pay their tax bill on time, including those who cannot use the online service, can continue to use HMRC’s Time to Pay Self-Assessment helpline to agree a payment plan.

Do you keep missing those payment deadlines and feel that you are forever playing catch-up? HMRC’s time to pay schemes are just what you need. With the support of Onyx we can liaise with HMRC on your behalf to secure an affordable payment plan.

GET IN TOUCH WITH ONYX

If you or your business needs help and financial support, then please contact us. At Onyx we can review where your business is at financially to help decide which support will be best.

Contact us now or e-mail us at  enquiries@onyxaccountants.co.uk for a FREE no obligation consultation.

Got any questions or queries? Our friendly team of tax specialists are happy to help. Just drop us a line! Call us on 0121 753 5522 or 01902 759 800.

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