As further restrictions have come into force for what looks like the next 6 months, the impact on the economy continues.
The Chancellor of the Exchequer, Rishi Sunak announced this afternoon the new measures the government are taking to help protect jobs and support businesses across the UK.
Here is a breakdown of the new measures announced today:
- A new wage subsidy scheme. Replacing the job retention scheme, the new scheme aims to protect “viable2 jobs that may be lost when furlough comes to an official end next month. If you currently employ staff that may be made redundant due to reduced demand, the governments wage subsidy scheme allows you to help keep your staff employed by topping up their wages. As long as staff are working at least a third of their usual hours and those hours are being paid by you, the employer. The support will be targeted to those who need it most, so therefore all SME’s are eligible. Larger companies will only be eligible if their turnover has fallen as a consequence of the crisis. The scheme is also available to those who did not use the furlough scheme and comes into effect at the beginning of November and will be in place for six months.
- Coronavirus Loan Support schemes extended. The Business Interruption Loan and The Bounce Back Loan application deadlines have been extended to the end of November.
- Pay As You Grow Loan Repayments. Businesses who took out a Bounce Back Loan will now be offered extended repayment terms. Instead of repaying back the loan within five years, businesses will now have six to 10 years to make repayments, potentially halving their monthly repayments. Those who are struggling, can choose to make interest-only payments, and businesses who are facing big financial difficulties can suspend all payments for 6 months.
- The self employed grant is to be extended. Businesses eligible for self employment grant will be able to apply again on similar terms as before over the coming months.
- Halt of VAT increase for hospitality and tourism sector. The government are not increasing VAT planned for the hospitality and tourism sector and will keeping at 5% until until March 2021.
- Deferred VAT payments. Businesses who pay VAT and derred payment until March 2021, now have the option to spread that VAT payment over 11 monthly payments, instead of one lump sum.
Rishi Sunak repeated in his announcement today, that he “could not save every job, nor could he save every business”, which is clearly evident over the past few months, though these new measures will be welcomed by many.
That being said, whilst these measures do help some businesses – there are still gaps where business owners are not supported, again, and many are still recovering or trying to manage the decrease in demand for their products/services. The winter months will be tough for a lot of businesses, it’s important that we continue to work together and support each other where we can.
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