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Winter Economy Plan

GUEST ARTICLE

SEPTEMBER 2020

Winter Economy Plan – here’s how it will affect you 

 

The Chancellor unveiled his Winter Economy Plan last week which signalled the Government’s commitment to protecting businesses and their workers, with the launch of a new Job Support Scheme to replace furlough and an extension to the Self-Employment Income Support Scheme (SEISS).

 

These measures provide further certainty to businesses and employees affected by COVID-19, with the package assisting companies through the uncertain months ahead.

 

Job Support Scheme

 

A new Job Support Scheme will be introduced from ‌‌1‌‌st November to protect viable jobs where businesses are facing lower demand over the winter months due to the Coronavirus.

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, as their employer, will continue to pay the wages for hours your staff work. For hours not worked, you and the Government will each pay one-third of their usual wages, with the Government’s contribution capped at £697.92 per month. 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 23rd 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 23rd 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

 

The Job Support Scheme is available to all UK employers even if you have not previously applied under the Coronavirus Job Retention Scheme (CJRS). The scheme will also operate in addition to the Job Retention Bonus.

 

Extension to the reduced rate of VAT for hospitality and tourism

 

The Government has extended the temporarily reduced rate of VAT (5%) to tourist attractions and goods and services supplied by the hospitality sector, which will now end on 31‌st March 2021 across the UK.

 

Self-Employed support

 

The Self Employment Income Support Scheme (SEISS) is to extend to help those who continue to trade actively but face reduced demand due to COVID-19. The initial grant will cover three months’ of profits for November to the end of January 2021 and be worth 20% of average monthly profits up to £1,875.

 

A second grant will also be made available to cover the period from February to the end of April.

 

Loan applications

 

Deadlines to apply for Coronavirus loan schemes will extend to the end of November and covers CBILS, CLBILS, Bounce Back Loans and the Future Fund.

 

VAT deferral

 

Those businesses who deferred payments that were due between 20th March and 30th June 2020 must repay this to HMRC by 31st March 2021. However, you can now use the New Payment Scheme to spread these repayments over equal, interest-free instalments up to 31st ‌March 2022.

 

Income Tax deferral

 

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

 

If you are unable to pay your Self-Assessment bill in full by 31st ‌January 2021, you can set up a Time to Pay plan of up to 12 months online without speaking to us. If you have Self-Assessment tax debts of up to £30,000, you can access this Time to Pay facility through GOV‌.UK and will receive automatic and immediate approval.

 

If your Self-Assessment debts are more than £30,000, or you need longer than 12 months to repay your debt in full, you will still be able to use HMRC’s Time to Pay arrangement but must contact them direct or via ourselves. You can reach HMRC’s Time to Pay COVID helpline on 0800 024 1222.

 

For more information, contact Haworths Chartered Accountants on 01729 823755 or email enquiries@haworths.co.uk.

 

ENDS

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