Legal Small Business Advice

New Covid 19 support for business announced in Winter Economy Plan

19 Nov 2020

Following this week’s tightening of Coronavirus restrictions, the Chancellor Rishi Sunak’s announcements today were very timely.

  We are waiting on more details, but these are the early announcements-

New Jobs Support Scheme

  • Starting 1 November 2020
  • 6 month scheme
  • Employees need to work at least 33% of their hours
  • Lost hours will be covered 33% by Government, and 33% by Employer, so:Hours not worked:
    • 1/3 Government
    • 1/3 Employer
    • 1/3 not paid
  • This will mean any employees part of the scheme will get 77% of their usual pay
  • So if you normally get paid £2,000 and you work half your hours, you'd get £1,000 normal pay, plus £333 from your employer and £333 from the government
  • Employers will not be able to issue redundancy notices to employees on the Job Support Scheme.

Help for Self Employed

  • There will also be more support for the Self Employed, but we await more detail
  • It will be on a similar basis to the new Jobs Support Scheme above

VAT Deferred to 31 March 2021

  • Where you’ve deferred your VAT to 31 March 2021:
  • You can now repay this over 11 instalments
VAT reduction extended
  • Temporary VAT reduction from 20% to 5% for some sectors will remain in place until 31 March 2021

Pay as You Grow

For business who have taken Government backed loans, and are “in real trouble”
  • CBILS and BB loan repayments can now be extended from 6 to 10 years
  • Repayments can move to interest only
  • Or payments can be suspended for up to 6 months
  • You credit rating won’t be affected
  • There will be a new loan scheme to be announced January 2021

Dividend payments will be restricted

For larger companies who have benefited from furlough grants, dividend distributions will be restricted