[ad_1]
- It is essential to plan a new Employment Support Plan and an expansion of the Income Support Plan for self-employment.
- and more than a million businesses will gain flexibility to help repay loans
Chancellor Rishi Sunak today outlined the government’s additional support to bring certainty to companies and workers affected by the coronavirus across the UK.
Delivering a speech in Parliament, the Chancellor announced a package of measures that will continue to protect jobs and help companies get through the uncertain months ahead as we continue to combat the spread of the virus. The package includes a new Employment Support Plan to protect millions of returning workers, the expansion of the Self-Employment Income Support Plan, and a 15% VAT reduction for the hospitality and tourism sectors. , and helps businesses repay government-backed loans.
The announcement comes after the Prime Minister established new measures to combat the spread of the virus during the winter, while preserving the ability to grow the economy.
Finance Minister Rishi Sunak said:
The resurgence of the virus and the measures we must take in response pose a threat to our fragile economic recovery …
Our approach to the next phase of support should be different from the previous one.
The main objective of our economic policy remains unchanged, to support the work of the people, but the way in which we achieve it must evolve.
Since the beginning of the pandemic, the government has taken swift action to save lives, limit the spread of the disease, and minimize damage to the economy.
Ministers have unveiled one of the most generous and comprehensive economic plans in the world with more than £ 190 billion of support for people, businesses and public services, including paying the salaries of nearly 12 million people and supporting more than one million companies through grants and loans. and rate cuts and announcement of the Employment Plan in July.
The government has always been clear that it will keep its support under review to protect jobs and the economy, and today’s action will reflect the changing circumstances and uncertainty of the months to come. The package of measures, which applies to all regions and nations of the UK, includes:
Support for workers
A new employment support plan will be introduced starting November 1 to protect viable jobs in companies facing lower demand during the winter months due to the coronavirus.
Under the plan, which will run for six months and will help keep employees tied to the workforce, the government will contribute to the wages of employees who work less than normal hours due to declining demand.
Employers will continue to pay staff wages for the hours they work, but for hours not worked, the government and the employer will each pay a third of their equivalent wage.
This means that employees who can only return to work in a shorter time will be paid two-thirds of the hours for the hours they cannot work.
To support only viable jobs, employees must work at least 33% of their regular hours. The level of the grant will be based on the employee’s usual salary, capped at £ 697.92 per month.
The Employment Support Program will be open to companies across the UK, even if they have not previously used the licensing program, and further guidance will be released in due course.
It is designed to accompany the Job Retention Bonus and could be worth more than 60% of the average salary of workers who have been suspended, and it is maintained until the beginning of February 2021. Companies can benefit from both schemes to help protect the jobs.
In addition, the Government continues to support millions of the self-employed by expanding the Self-Employment Income Support Scheme (SEISS) grant. An initial taxable grant will be provided to those who are currently eligible for SEISS and continue to actively trade, but face reduced demand due to the coronavirus. The initial lump sum will cover three-month benefits for the period from November to the end of January next year. This is worth 20% of the average monthly earnings, up to a total of £ 1,875.
An additional second grant, which can be adjusted to respond to changing circumstances, will be available to the self-employed to cover the period from February 2021 to the end of April, ensuring that our support continues into next year. This is in addition to the over £ 13 billion of support that has already been provided to over 2.6 million self-employed workers through the first two stages of the Self-Employed Income Support Program, one of the most generous in the world.
Tax reductions and deferrals
As part of the package, the government also announced that it will extend the temporary VAT cut of 15% for the tourism and hotel sectors until the end of March next year. This will give companies in the sector, which has been severely affected by the pandemic, the confidence to maintain staff as they adapt to a new business environment.
In addition, up to half a million companies that deferred their VAT invoices will have more room to breathe through the New Payment Scheme, which gives them the option to pay in smaller installments. Instead of paying a lump sum in full at the end of March next year, they will be able to make 11 smaller payments without interest during the 2021-22 fiscal year.
In addition to this, around 11 million self-assessment taxpayers will be able to benefit from an additional 12-month extension from HMRC on the “Time to Pay” self-service facility, ie payments deferred from July 2020 and those due in January . 2021, now it will not be necessary to pay until January 2022.
Give companies flexibility to repay loans
The burden of more than a million businesses that applied for a recovery loan will be eased through a new flexible payment system Pay as You Grow. This will provide flexibility for businesses paying off a repossession loan.
This includes extending the duration of the loan from six years to ten, which will cut monthly payments by almost half. Companies will also have interest periods of up to six months and pay holidays. These measures will further protect jobs by helping companies recover from the pandemic.
We also intend to give the lenders of the Coronavirus Business Interruption Loan Scheme the ability to extend the duration of the loans from a maximum of six to ten years if this helps companies repay the loan.
In addition, the chancellor also announced that he will extend applications for the government loan schemes for the coronavirus that are helping more than one million companies until the end of November. As a result, more companies will now be able to benefit from the Coronavirus Business Interruption Loan Scheme, the Coronavirus Large Business Interruption Loan Scheme, the Recovery Loan Scheme and the Future Fund. This change aligns all the completion dates of these schemes, ensuring that there is more support for those companies that need it.
Investment in public services
At the start of the pandemic, the Chancellor pledged to provide the NHS and public services with the necessary support to respond to the coronavirus, and as of today, the Treasury has approved £ 68.7 billion of additional funding, including £ 24.3 billion since the summer. Economic update in July.
This funding has helped ensure the purchase of PPE for frontline staff, provided free school meals for children while they are at home, and protected the country’s most vulnerable. Furthermore, the £ 12bn funding to implement the Test and Trace program has played a key role in helping unlock the economy, allowing businesses like restaurants and bars to serve customers again.
As announced earlier this year, the Treasury has also guaranteed that decentralized administrations will receive at least £ 12.7bn in additional funding. This gives Scotland, Wales, and Northern Ireland budget certainty for the coronavirus response in the coming months.
Business group responses
Dame Carolyn Fairbairn, CEO of CBI, said:
These bold steps from the Treasury will save hundreds of thousands of viable jobs this winter. It is correct to direct aid to future jobs, but it can only be part-time as long as demand remains stable. This is how skills and jobs can be preserved to allow for quick recovery.
Wage support, tax deferrals and help for the self-employed will reduce the scarring effect of unnecessary job losses as the UK battles the virus. Employers will apply the same spirit of creativity, taking every opportunity to retrain and improve their workers.
The Chancellor has listened to the business evidence and has acted decisively. It is this spirit of agility and collaboration that will help make 2021 a year of growth and renewal.
Mike Cherry OBE, National President of the Small Business Federation, said:
Small businesses in the UK are facing an incredibly difficult winter. Today’s support package is the other side of the coin from Tuesday’s COVID-19 trade restrictions.
It is a quick and meaningful intervention, extending emergency loans for SMEs, creating new wage support for small employers and the self-employed, and providing cash flow assistance on VAT deferrals and a new payment term for tax bills to HMRC.
We welcome the Chancellor’s ensuring that decisions to protect public health are based on the need to protect the economy, people’s jobs, and the prospects of young people in our schools and workplaces.
BCC CEO Adam Marshall said:
The measures announced by the Chancellor will give businesses and the economy a major shot in the arm. Chambers of Commerce have consistently called for a new generation of support to help preserve livelihoods and ease the cash pressures businesses face as they navigate a challenging and uncertain winter.
The Chancellor has responded to our concerns with substantial steps that will help companies preserve jobs and navigate for months to come. The new salary support scheme will help many companies retain valuable employees after leave ends, and the extension of business loan schemes and tax forgiveness will reduce the immediate pressure on cash flow for many affected companies.
As we look beyond the immediate challenge, more will need to be done to rebuild and renew our economy. Chambers of commerce across the UK will continue to work with the government to ensure that the benefits of these schemes are delivered to businesses on the ground.
