Major Changes Announced
Posted: September 24, 2020
Posted: 24 September 2020
Major changes have today been announced by the Chancellor. Detailed documents are awaited, summaries of the measures that the government has announced has been published and provide more information:
www.gov.uk/government/news/chancellor-outlines-winter-economy-plan
www.gov.uk/government/publications/winter-economy-plan/winter-economy-plan
An initial summary of the measures announced:
Job retention scheme (mainly targeted at SMEs)
- 6 months from 1 November
- Employees work minimum of 1/3 of their hours
- Balance of hours not worked – government and employer pay 1/3 each
- Employee therefore works 1/3 of hours and receives 77% of normal pay (33% for hours worked and 2/3 of the 2/3 of the hours not worked, 44%)
- Employer cost is 33% for the hours worked and 22% (1/3 of 2/3) of total pay for the hours not worked, so 55% of normal pay
- No mention of NI or pension so far – looks like employer will pay
- Cannot make those employees redundant whilst claiming the grant
- Grant capped at £697.92 per month
Self employment scheme at 20% of profits maximum £1,875 covering November to January, there may be a further grant afterwards
Deferred VAT which is due in March 2021 – can be repaid over 11 months
Self assessment tax due on 31 January 2021 -Automatic deferral only applies to those with self assessment tax debts of up to £30,000, which will have to be paid by instalments. For debts above that amount, taxpayers will have to negotiate Time to Pay arrangements with HMRC via the helpline in the usual way.
Hospitality sector – VAT rate to stay at 5% until 31 March 2021
Bounce back and CBILS loans – repayment period extended to 10 years, time for applications for new loans extended to end November
The Chancellor’s speech can be found here: www.gov.uk/government/speeches/chancellor-of-the-exchequer-rishi-sunak-on-the-winter-economy-plan
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