Your guide to the latest support for businesses announced in the Winter Economy Plan
New measures to support workers and businesses impacted by Covid-19 over winter include the Job Support Scheme, extensions to loan and grant schemes, and tax payment deferrals.
A six-month Job Support Scheme will be introduced on 1 November to help protect jobs in businesses facing lower demand over winter and provide support after the furlough scheme ends. The new scheme is one of several measures announced by the Chancellor as part of the Winter Economy Plan to support workers and businesses, which includes extending the grant scheme for self-employed workers, tax payment deferrals, extending applications and introducing flexible repayments for the coronavirus loan schemes.
Job Support Scheme
Under the Job Support Scheme, the government will contribute towards the wages of employees who are working fewer than normal hours due to decreased demand.
Employers will continue to pay the wages of staff for the hours they work, but for the hours not worked, the government and the employer will each pay one third of their equivalent salary. Employees must be working at least 33% of their usual hours.
The grant will be calculated based on the employee's usual salary, capped at £697.92 a month. The scheme will be open to businesses across the UK, even if they have not previously used the furlough scheme.
Self Employment Income Support Scheme Grant (SEISS)
The government is also extending the Self Employment Income Support Scheme Grant (SEISS).
An initial taxable grant will be provided to those who are currently eligible for SEISS and are continuing to actively trade but facing reduced demand. The lump sum will cover three months’ worth of profits for the period from November to the end of January next year, worth 20% of average monthly profits, up to a total of £1,875.
A second grant will be available for self-employed individuals to cover the period from February 2021 to the end of April.
Tax payment deferrals
Businesses that deferred their VAT bills will have the option to pay it back in smaller instalments under the “New Payment Scheme”. Instead of paying a lump sum in full in March next year, businesses can make 11 smaller interest-free payments during the 2021-22 financial year.
Self-assessment taxpayers will be able to benefit from a 12-month extension from HMRC on the “Time to Pay” self-service facility, meaning payments deferred from July 2020, and those due in January 2021, do not need to be paid until January 2022.
Flexibility to pay back loans
A new “Pay as You Grow” flexible repayment system will provide flexibility for businesses repaying Bounce Back Loans. This includes extending the length of the loan from six years to ten. Interest-only periods of up to six months and payment holidays will also be available where needed.
Coronavirus Business Interruption Loan Scheme lenders will also be able to extend the length of loans from a maximum of six years to ten years if it will help businesses to repay the loan.
Applications for the coronavirus loan schemes will also be extended until the end of November, which includes the Coronavirus Business Interruption Loan Scheme, the Coronavirus Large Business Interruption Loan Scheme, the Bounce Back Loan Scheme and the Future Fund.