The Chancellor has announced additional government support this week for businesses and employees who have been impacted by COVID-19. A summary of these measures have been outlined below:

A New ‘Job Support Scheme’

The new Job Support Scheme will be introduced from 1 November 2020 to replace the current Coronavirus Job Retention Scheme (CJRS) ending at the end of October. The Scheme will run for 6 months to April 2021 and is designed to help protect jobs throughout the winter period.

Under the scheme, the government will contribute towards the wages of employees who are working fewer than normal hours due to decreased demand. Employers will continue to pay the wages of staff for the hours they work, but for any usual hours not worked, the government and the employer will each pay 1/3 of their equivalent salary, which means that employees will receive at least two thirds of their usual wages for the hours not worked.

To support only viable jobs, employees must be working at least 33% of their usual hours. The level of grant will be calculated based on employee’s usual salary, capped at £697.92 per month. Employers will need to meet their share of the pay for unworked hours, and all employer National Insurance contributions and statutory pension contributions, from their own funds.

To be eligible, employees must be an employee and registered on PAYE payroll on or before 23 September 2020 and work at least 33% of their usual hours (employees can work more than 33% of their usual hours and still qualify)

The Job Support Scheme will be open to employers across the UK even if they have not previously applied under the Coronavirus Job Retention Scheme (CJRS) which ends on 3‌1‌‌ ‌‌October. Claims can start from December onwards and will be paid on a monthly basis.

The scheme is open to small and medium-sized businesses (usually defined as firms with 250 employees or less). Large businesses whose revenue has fallen because of coronavirus will also be eligible but will have to meet a financial assessment test.

The scheme will operate in addition to the Job Retention Bonus. Businesses can benefit from both schemes in order to help protect viable jobs.

SEISS Grant Extension

Support for self-employed individuals will continue with the extension of the Self-Employment Income Support Scheme (SEISS) grant.

Self-employed individuals and members of partnerships who are eligible for the SEISS and are actively continuing trading but are experiencing reduced demand due to COVID-19 will be eligible for a further SEISS grant to provide support over the winter months.

The first grant will cover a three-month period from the start of November 2020 until the end of January 2021. It will be a taxable grant to cover 20% of average monthly trading profits, paid out in a single installment covering three months’ worth of profits, and capped at £1,875 in total.

An additional second grant, which may be adjusted to respond to changing circumstances, will be available for self-employed individuals to cover the period from February to the end of April.

Extension to the reduced rate of VAT for Hospitality and Tourism

The government has extended the temporary reduced rate of VAT (5%) to tourist attractions and goods and services supplied by the hospitality sector. This relief came into effect on 15 July 2020 and will now end on 3‌1‌‌ ‌‌March 2021 in the UK.

VAT Deferral New Payment Scheme

If businesses deferred VAT payments that were due between 20 March and 30 June 2020, then these payments need to be made to HMRC by 3‌1‌‌ ‌‌March 2021.

However, employers can use the New Payment Scheme to spread these payments into smaller monthly and interest-free payments up to 3‌1‌‌ ‌‌March 2022.

Alternatively, they can make payments as normal by 3‌1‌‌ ‌‌March 2021 or make Time To Pay arrangements with HMRC if they need more tailored support.

Deferral of Self-Assessment Payments

Self-assessment taxpayers will be able to benefit from a separate additional 12-month extension to the due date of Self-Assessment payments, meaning payments deferred from July 2020, and those due in January 2021, will now not need to be paid until January 2022.

Amendments to repayments on Bounce Back Loans

Businesses who have taken out Bounce Back Loans will be eligible to make repayments via a new Pay As You Grow repayment system to provide increased flexibility. The allows businesses to extend the repayment of the loan period from 6 years to 10 years which will significantly cut the monthly repayments.

It was also announced that the application window for Bounce Back Loans will be extended until the end of November 2020.