The chancellor has decided to cancel the planned Autumn Budget this year.

The last budget in March was just before lockdown, and we have seen a series of interim announcements with emergency measures.

Planned for October/November the Autumn Budget 2020 was expected to introduce tax rises to pay for the coronavirus relief schemes earlier this year.

However, with the start of the second wave of the pandemic, the direction of travel is not yet being reversed and both new and extended support measures have been announced instead as the Winter Economy Plan.

New – The Job Support Scheme

There is a new Job Support Scheme, to help employees working reduced hours to keep their jobs.

It is available to small and medium sized businesses, and those larger companies that have suffered the most.

It is available to all employees (via these employers)

It is to run for six months from 1^st November

Under the scheme the employer, the government and the employee share the cost of unworked hours –

• the employee’s wages are reduced by one third,
• the government covers one third,
• the employer has the residual cost of one third.

Although it may be seen as a successor to the furlough scheme, it is independent – unlike the flexi furlough scheme, employees do not need to have been furloughed to qualify.

Eligible workers must have been reported on the employer’s payroll before 23^rd September 2020

For the first 3 months of the scheme, employees must work at least 33% of their usual hours.  These criteria will be revisited by HMRC for the final 3 months.

The government will fund a maximum of £697.92 per employee per month.

The grant will not cover employer’s national insurance or pension contributions

An employee may leave the scheme and re-join later, provided each period on the scheme is a minimum of 7 days long.

Extended – Self Employed Income Support Scheme (SEISS)

We had been told that the second grant would be the last, but two further grants have now been announced.

Eligibility criteria remain the same

The first new grant will be for the period November to January and will be for 20% of average profits, capped at £1,875

The level of the second grant, for the period February to April, is still to be agreed.

 

Extended – Cashflow Support

Four of the cash flow support measures are being extended.

1. Bounce Back Loans

Existing bounce back loans may now use new Pay as you grow repayment terms as follows

• Repayment period may be extended from 6 to 10 years
• Option to repay just the interest for 6 months
• Option for a repayment holiday

2. Coronavirus Business Interruption Loans (CIBLS)

Guarantee term may be extended to 10 years

Application period is to be extended to 30^th November

3. Tax Deferment

The VAT deferment period ends 31^st March 2021 – but repayment may now be made in 11 monthly instalments interest free

The Self-Assessment tax deferment period ends 31^st January 2021 – but repayment may now be made in 12 monthly instalments interest free

4. Reduced rate VAT for Hospitality & Tourism

A reduced 5% Vat rate was introduced 15^th July 2020 for certain supplies in the hospitality and Tourism sector.  This was a temporary reduction due to end on 12^th January 2021.  This is now extended to end 31^st March 2021.