The Winter Economy Plan

On the 24^th of September, the UK government outlined a series of tax plans to help sustain the economy during the winter months.

The Jobs Support Scheme

In order to protect the jobs whose demand has been reduced by the coronavirus, the government introduced a new scheme, The Job Support Scheme, which is expected for run for a period of 6 months.

During this period, employees who are working fewer hours will be paid for the hours worked by their employers. The government and employers will contribute to the wages of the workers by paying a third each for the hours not worked.

• Employees must be working at least 33% of their usual hours
• It is available for all businesses in the United Kingdom and is not limited to businesses who used the Coronavirus Job Retention Scheme
• The grant will be based on the employee’s salary and it will be capped at £697.92 per month

The Self Employment Income Support

The government also announced the continued support for the Self Employment Income Support Scheme (SEISS). A taxable grant will be available for those who are eligible for SEISS and are actively trading but have been impacted by the coronavirus negatively.

The initial lump sum will cover three months, November to the end of January 2021 and is 20% of the average monthly profits which is capped at £1,875.

Tax reductions and deferrals

The government also outlined an extension of the temporary 15% VAT reduction for the hospitality and tourism sector until 31 March 2021.

Also the government will allow businesses that deferred their VAT payments in March to June 2020 to pay their VAT in small instalments (equal 11 instalments between 2021 and 2022) as opposed to paying a lump sum in March 2021. These businesses will have to opt into the deferral scheme HMRC will put in place in by early 2021.

Self-assessment tax-payers will also have additional 12 month extension from HMRC. This means that payments deferred from July 2020 and those due in January 2021 do not have to be paid until January 2022.

Flexibility to pay back loans

Bounce Back Loan
The government also announced the introduction of “Pay as You Grow”, a flexible repayment system for businesses that took out the Bounce Back Loan. This will extend the term of the loan from six years to ten thus halving the monthly repayments.

Coronavirus Business Interruption Loan Scheme
Coronavirus Business Interruption Loan lenders will be given the opportunity to extend the length of the loan from six to ten years to help businesses repay the loan.

Finally, the government extended the application for the coronavirus loan schemes until the end of November.

Further guidance can be found here; and if you need any assistance please contact us at info@senigukconsulting.co.uk  or call us on 01279 772966 for a free initial consultation.