COVID-19: Winter Economy Plan

The Chancellor set out the next phase of the UK Government’s planned economic response…

Information as of Thursday 24 September 2020 at 2pm UK

The Chancellor, Rishi Sunak, announced on 23 September that there would be no Autumn Budget in the UK this year. Because of the problems caused by the COVID-19 pandemic, he instead made a statement to the House of Commons on 24 September setting out further action from the Government, aimed at helping individuals and businesses during such a difficult economic period.

Key announcements included:

Jobs Support Scheme (replacing the Coronavirus Job Retention Scheme/CJRS)

  • Small and Medium sized Enterprises (SMEs) may need to reduce the working time for certain employees. Employees who continue to work and be paid at least one third of their normal hours will be able to have their pay topped up by the Government to cover two thirds of pay.
  • Large companies may still be eligible if they can prove turnover has fallen because of COVID-19. The details on this point will be crucial.
  • It does not matter if the employer has or has not used the CJRS until now.
  • It is initially available for the next six months.

Business loans

  • The repayment of “Bounce-back” loans may be extended from six to ten years. Further relaxations announced include the chance for companies to make interest-only payments or suspend payments for up to six months without affecting credit rating.
  • The Government guarantee for Coronavirus Business Interruption Loan Scheme (CBILS) loans will be extended to 10 years.
  • The Government is working on a new loan scheme to be available from January 2021.

Self Assessment

  • Individuals that have personal liabilities under Self-Assessment will have greater flexibility to defer tax payments.

VAT

  • Hospitality and Leisure industry: the temporary 5% rate cut will extend until 31 March 2021.
  • Businesses will have greater flexibility to defer VAT payments if needed.

Further analysis and comment from F&L will follow; however if you would like to discuss your individual circumstances, please contact us.

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