JOB RETENTION SCHEME ANNOUNCMENT The latest Chancellor, Rishi Sunak announcement - 24th September 2020
The government have announced their Winter Economy Plan including the Job Retention Scheme and the Extension of Self-Employment Income Support Scheme.
Job Retention Scheme Septmber Update
To be eligible for this support the employee must be working a minimum of 33% of their usual hours and the grant will be capped at £697.92 a month.
How does this work in practice?
If someone was earning £1500 a month usually and is now only working a third of their normal hours therefore would be earning £500.
The government and the employer would then also need to pay a third of the remaining pay the employee would normally receive.
- £1000 divided by 3 = £333.00
- The employee would then receive £1166 in total.
- £500 for hours worked
- £333 from government under job support scheme
- £333 from employer under job support scheme
Under this scheme the employee will always be paid at least 77% of their normal pay.
All small and medium sized business will be eligible for the scheme however large business will be required to show that they have been adversely affected by COVID-19.
Extension of Self-Employment Income Support Scheme
Rishi Sunak announced that the Self Employment Income Support Scheme grant will cover November up until the end of January 2021 and then a second grant which “may be adjusted to respond to changing circumstances” will cover February 2021 to April 2021.
This scheme from November 2020 to January 2021 will cover up to 20% of average monthly profits up to a total of £1875 and will be provided in a lump sum.
Tax cuts and deferrals
The government has announced that the temporary 15% VAT cut for the tourism and hospitality sectors will be extended to the end of March next year.
VAT will now be able to be paid through the New Payment Scheme giving people the option to pay in 11 smaller interest free instalments rather than one lump sum. These payments will be paid during the 2021-2022 financial year.
Self-employed people will be able to take advantage of the ‘Time To Pay’ facility and pay July’s deferred payments and January 2021 payments in January 2022.
Bounce back loans
Bounce back loans will now be able to be paid through a ‘Pay as You Grow’ system. The loans will be paid back over 10 years rather than 6 cutting repayments by nearly half.
Coronavirus Business' Interruption Loan Scheme lenders will also have the option to extend loans from 6 years to 10 years to help business pay back the loans they have borrowed.
Investment in public services
£68.7 billion of additional funding has been approved for support the NHS and public services.
This funding has helped to supply PPE, provide free school meals to protect the most vulnerable children and roll out the Test and Trace programme.
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