Following another update from the Chancellor today, there are a number of important changes to share with you regarding the outgoing furlough scheme and the new incoming job support scheme.
Unsurprisingly, the furlough scheme is coming to an end. This was always likely to happen and today’s announcements confirmed that the furlough scheme will cease at the end of October.
The amount that employers could claim dropped from 80% to 70% this month and will decrease to 60% for its final month in October.
We have processed a huge number of claims for clients so I would imagine you are all well covered, but If you do need any advice or help around claiming furlough up to the end of October, do let us know.
Job Support Scheme
Effectively replacing the furlough scheme is the new “Job Support Scheme” which will commence from 1 November 2020 and run for 6 months.
In order to be eligible for this, employees must work at least 1/3 of their normal hours. For those hours, they will be paid as normal by the employer.
For the employees remaining hours, the cost of this is split equally in to thirds. The employee loses 1/3 of the pay, 1/3 is paid by the employer and 1/3 is paid by the government.
For employees working 33% of their normal hours, they would receive 77% of their normal pay.
We will provide more information on this scheme and how to claim as soon as possible. It is suggested that the eligibility criteria for this scheme will be more stringent than the furlough scheme but most small / medium businesses are expected to be able to access it.
Employers will not be able to make redundancy notices to those workers who are on the scheme throughout its duration. This scheme is not expected to affect the job retention bonus either.
For businesses that acquired funding through either CBILS or Bounce Back loans, these can be extended from repayments over 6 years up to 10 years.
Businesses experiencing serious difficulties can apply to suspend payment or move to interest only repayments for a period of up to 6 months.
It is suggested that this will not have an adverse affect on credit ratings.
Furthermore, a new loan facility is due to be introduced in January 2021.
Businesses who deferred their VAT initially to 31 March 2021 will no longer have to pay a lump sum at the end of March. Instead, businesses will be offered the option of splitting the debt into smaller, interest free payments over the course of 11 months.
Additionally, the VAT rate reduction to 5% in the hospitality and leisure industries will remain until 31 March 2021.
For individuals struggling to pay their income tax bill due by 31 Jan 2021, if the debt is less than £30k, they will be able to go online and set up a payment plan to pay this debt over 12 months.
Debts over £30k need to be discussed with HMRC.
We hope you find the above information useful, but if you should have any queries please do not hesiate to contact the office on 01603 617361 or email@example.com.