Home Coin-Op Chancellor Announces NEW Jobs Support Scheme this week

Chancellor Announces NEW Jobs Support Scheme this week

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This week, Chancellor Rishi Sunak announced a number of measures in his Winter Economy Plan to support struggling businesses through the upcoming months.

The main proposal is a Jobs Support Scheme, which is designed to replace furlough. It means that workers will get up to two-thirds of their wages paid jointly by employers and Government even if they can’t work their normal hours due to COVID; in order to try to avoid further job losses.

All small and medium-sized businesses are eligible, but larger businesses must show their turnover has fallen during the crisis. Employers can use it even if they have not previous used the furlough scheme it replaces. It will run for six months from November.

Those businesses who have taken out bounce back loans during the lockdown now have longer to pay them back – with the initial six years extended to 10. Businesses who have difficulties paying back the loans can move to interest-only payments or even take a six-month payment holiday without damaging their credit ratings.

The government guarantee on Coronavirus Business Interruption Loans will also be extended to 10 years and a new successor loan guarantee programme will be announced in January.

The temporary reduction of VAT from 20% to 5% will remain in place until 31 March 2021 for those sectors currently benefitting – however this has not been extended to new sectors.

The Chancellor also announced extra support to help people with their income tax bills – but emphasised they would still need to be paid. Those with tax debt of up to £30,000 will be able to set up a payment plan for 12 months to January 2022.

“There are some positives to be taken from today’s announcement from the Chancellor,” John White, CEO of BACTA told Showmen Times “Those with staff on furlough or unable to support staff with reduced working hours will benefit from the Jobs Support Scheme. It’s also good to know that businesses have longer to pay back their loans. However – what we really need right now is for the Chancellor to reduce VAT to 5% for seaside arcades and to cut MGD to 5% to

support high streets and pubs. With approaching a third of our industry workforce either having lost their job already or currently under threat of losing it – we are also calling for the Chancellor to offer universal rates relief for 2021/22 across the industry and supply chain.”

 

From what Showmen Times have seen first hand of the industry currently this SCHEME may be too little too late for many STRUGGLING businesses.

 

HMRC information on these new measures are below:-

 

Job Support Scheme

A new Job Support Scheme will be introduced from ‌‌1‌‌ November to protect jobs where businesses are facing lower demand over the winter months due to coronavirus (COVID-19).

Under the scheme, which will run for six months, the government will contribute towards the wages of employees who are working fewer than normal hours due to decreased demand.

You will continue to pay the wages for the hours your staff work. For the hours not worked, you and the government will each pay one third of their usual wages (capped at £697.92 per month). You will need to meet your share of the pay for unworked hours and all your National Insurance contributions and statutory pension contributions, from your own funds. This means that employees will receive at least two thirds of their usual wages for the hours not worked.

To be eligible, employees must:

  • be registered on your PAYE payroll on or before 23 September 2020. This means a Real Time Information (RTI) submission notifying payment in respect of that employee must have been made to HMRC on or before 23 September 2020
  • work at least 33% of their usual hours. The government will consider whether to increase this minimum hours threshold after the first three months of the scheme.

Further eligibility criteria is available on GOV‌.UK by searching ‘Job Support Scheme factsheet’.

The Job Support Scheme will be open to employers across the UK even if you have not previously applied under the Coronavirus Job Retention Scheme (CJRS) which closes on 3‌1‌‌ ‌‌October.

The Job Support Scheme will start from 1‌‌ November and you will be able to claim in December. Grants will be paid on a monthly basis.

The scheme will operate in addition to the Job Retention Bonus. You and your employees can benefit from both schemes in order to help protect viable jobs.

For information on what is covered by the grant, which employers and employees are eligible, and how to claim, search ‘Job Support Scheme factsheet’ on GOV‌.UK.

Extension to the reduced rate of VAT for Hospitality and Tourism

The government has extended the temporary reduced rate of VAT (5%) to tourist attractions and goods and services supplied by the hospitality sector. This relief came into effect on 15 July 2020 and will now end on 31‌‌ March 2021 across the UK.

VAT Deferral New Payment Scheme

If you deferred payments that were due between 20 March and 30 June 2020, then these payments need to be made to HMRC by 31‌‌ March 2021. You can use the New Payment Scheme to spread these payments over equal instalments up to 31‌‌ March 2022. Alternatively, you can make payments as normal by 31‌‌ March 2021 or make Time To Pay arrangements with HMRC if you need more tailored support.

New Self Assessment Self-Serve Time To Pay Scheme

If you deferred paying your July 2020 Payment on Account, you will need to pay the deferred amount, in addition to any balancing payment and first 2020/21 Payment on Account, by 3‌1‌‌ ‌‌January 2021. This may be a larger payment than you usually pay in January.

If you’re unable to pay your Self-Assessment (SA) bill in full by 31‌‌ January 2021, you can set up a Time to Pay payment plan of up to 12 months online without speaking to us. If you have SA tax debts of up to £30,000, you’ll able to access this Time to Pay facility through GOV‌.UK and will get automatic and immediate approval. If your SA debts are over £30,000, or you need longer than 12 months to repay your debt in full, you will still be able to use our Time to Pay arrangement by calling HMRC.

Other business support schemes:

Changes to CJRS – what you need to do from 1‌‌ October

From 1‌‌ October, HMRC will pay 60% of usual wages up to a cap of £1,875 per month for the hours furloughed employees do not work.

You will continue to pay your furloughed employees at least 80% of their usual wages for the hours they do not work, up to a cap of £2,500 per month. You will need to fund the difference between this and the CJRS grant yourself.

The caps are proportional to the hours not worked. For example, if your employee is furloughed for half their usual hours in October, you are entitled to claim 60% of their usual wages for the hours they do not work, up to £937.50 (half of £1,875 cap). You must still pay your employee at least 80% of their usual wages for the hours they don’t work, so for someone only working half their usual hours you’d need to pay them up to £1,250 (half of £2,500 cap), funding the remaining portion yourself. For help with calculations, search ‘Calculate how much you can claim using the Coronavirus Job Retention Scheme’ on GOV‌.UK.

You’ll also continue to pay your furloughed employees’ National Insurance and pension contributions from your own funds.

 

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