New Coronavirus Financial Support Measures
The Chancellor announced a number of new support measures for those affected by COVID on 24 September.
Jobs Support Scheme
The existing Furlough scheme is due to end on 31 October and the Chancellor has just announced a new Jobs Support Scheme which will succeed it. The announcement made the following points:
- The government will support the wages of people in work and gives employers the option to keep people in work on reduced hours, to avoid making them redundant.
- Employees will be required to work at least a third of their usual hours, and be paid for that by the employer.
- The government and the employer will pay a third each for the hours they can't work
- It means someone working a third of their hours would receive 77% of their pay
- Grant is capped at £697.92 per month
- All SMEs are elgibile, but larger businesses will only be eligible if their turnover has fallen through the Covid crisis.
- The new Scheme is open to all employees, even if not previously furloughed.
- The Scheme will run for six months from November.
- Businesses will not be able to issue redundancy notices to employees on the Job Support Scheme
- There will be restrictions on capital distributions to shareholders by large companies.
- The employer will also still be eligible to claim the job retention bonus for employees covered by the Jobs Support Scheme.
Self Employed Income Support Scheme
Rishi Sunak also announced he was extending the scheme for self-employment on "similar terms" to the existing job support scheme:
- Eligibility same as for previous scheme
- The grant will cover 3 months profiits from November 2020 to January 2021.
- It will cover 20 per cent of average monthly trading profits up to a total of £1,875.
- A further grant for February to April may be available depending upon circumstances.
The Chancellor also announced a "pay as you grow" scheme for businesses which took government guaranteed loans during the crisis.
"Loans can now be extended from six to ten years nearly halving the average monthly repayment," he said.
They can also move to interest only payments or suspend payments if they are "in real trouble" for up to six months.
He said no credit rating will be affected.
The deadline for applications has been extended to 30 November
Coronavirus Business Interruption Loans will also be extended for up to 10 years and a new loan scheme will be announced in January.
For those businesses who deferred their VAT payments until March 2021, they will now be able to pay this over monthly payments over the next 11 months interest free.
The reduced rate of 5% for hospitality and tourism will remain until 31 March next year.
Once full details of these schemes are made available we will make further announcements.