In the face of a return to restrictions to limit the spread of Coronavirus, on September 24th, Chancellor Rishi Sunak has delivered a statement setting out plans to help workers and businesses hit by new coronavirus restrictions.
The government announced that up to half a million business who deferred their VAT bills will be given more breathing space through the New Payment Scheme, which gives them the option to pay back in smaller instalments. Rather than paying a lump sum in full at the end March next year, they will be able to make 11 smaller interest-free payments during the 2021-22 financial year.
‘Bounce-back Loans to Be Extended
The Chancellor announced the following adjustments to existing arrangements;
A new ‘Pay as You Grow’ flexible repayment system will provide flexibility for firms repaying a Bounce Back Loan. This includes extending the length of the loan from six years to ten, which will cut monthly repayments by nearly half. Interest-only periods of up to six months and payment holidays will also be available to businesses.
Coronavirus Business Interruption Loan Scheme (CBILS) lenders will have the ability to extend the length of loans from a maximum of six years to ten years if it will help businesses to repay the loan.
An extension for applications for the government’s coronavirus loan schemes until the end of November to include; the Coronavirus Business Interruption Loan Scheme, the Coronavirus Large Business Interruption Loan Scheme, the Bounce Back Loan Scheme and the Future Fund.
Jobs Support Scheme
The Job Support Scheme is designed to protect viable jobs in businesses who are facing lower demand over the winter months due to Covid-19, to help keep their employees attached to the workforce. The scheme will open on November 1st 2020 and run for 6 months.
The company will continue to pay its employee for time worked, but the cost of hours not worked will be split between the employer, the Government (through wage support) and the employee (through a wage reduction), and the employee will keep their job.
The Government will pay a third of hours not worked up to a cap, with the employer also contributing a third. This will ensure employees earn a minimum of 77% of their normal wages, where the Government contribution has not been capped.
Employers using the Job Support Scheme will also be able to claim the Job Retention Bonus if they meet the eligibility criteria.
* Information correct at time of publication, details taken directly from Government websites where possible.