Winter Economy Plan

What a year this is turning out to be!

We hope you are well and safe.

Winter Economy Plan
Given the resurgence of Covid-19, it came as no surprise when it was announced that this Autumn’s budget was cancelled, then followed with today’s economic statement by the chancellor, the ‘Winter Economy Plan’.

Here’s a brief run down of what was announced
The ‘Winter Economy Plan’ includes:

A new Job Support Scheme

  • Replaces the Coronavirus Job Retention scheme (CJRS) which ends on 31 October.
  • Runs from 1 Nov 2020 to 30 April 2021
  • Anyone employed as of 23 September 2020 eligible providing not on redundancy notice
  • Employee must work 33% of usual hours to qualify
  • For hours not worked, employer pays one-third, government covers one-third and the remaining third is a reduction in pay for the employee
  • Gov contribution capped at £697.92
  • Gov contribution does not pay for any of the NIC or pension costs
  • Significantly less generous than CJRS as maximum government contribution is now only 22%, which you must match for unpaid hours
  • We will be in touch with next steps once full details announced and legislation available
  • HMRC fact sheet with more details just released in the last few hours here: Job Support Scheme Factsheet

SEISS grant extension

  • Further two taxable grants take the SEISS scheme all the way up to April 2021 despite the second grant in August being dubbed “Second and Final”
  • One for November 2020 to January 2021 – based on 20% of average monthly profits, capped at £1,875
  • Another grant for February 2021 to April 2021 will have details announced in due course
  • Reminder that the Second SEISS grant closes on 19 October 2020 so ensure you have applied for that if you were eligible

Bounce-back loans

  • Dubbed as ‘pay-as-you-grow’, loan repayments may be extended from six to ten years.
  • 6 months interest only payments available to those who have existing bounce back loan
  • Loan scheme open to new applications until 30 November 2020
  • New loan scheme coming in January 2021

Deferred tax bills

  • For those who delayed VAT payments between 20 March 2020 and 30 June 2020 can now pay their deferred amount in eleven equal, interest free instalments, starting in March 2021
  • Taxpayers who deferred income tax payments on account to 31 January 2021 can also pay this amount over a 12 month period if liability is less than £30k under enhanced time to pay arrangement. Yet to see if interest free but possibly not

VAT cut for hospitality and tourism

  • Extended until March 2021
  • The temporary cut to 5% was due to end 12 January 2021 but has been extended to 31 March 2021

As always the devil is in the detail (such as the Kickstart Scheme’s 30 placement requirement!) so we will be in touch with further updates as and when they become available.

The Middlers Team