NEW Job Support Scheme and other key updates from the Chancellor’s latest briefing.
The Chancellor, Rishi Sunak has unveiled government plans to protect jobs and support businesses over the coming months.
Read below to find out more....
Chancellor Rishi Sunak has revealed details of his Job Support Scheme that will replace furlough when it closes on 31st October.
The scheme will support those in ''viable'' jobs however this new scheme will not help the industries still in shutdown because of the pandemic.
What is the Job Support Scheme?
The Job Support Scheme will run for six months from 1st November. It will top up salaries in businesses which can't take employees back
To be eligible, employees must work for at least one-third of their normal hours. For hours not worked, the government and employer will each pay one-third of the remaining wages. This means the employee would get at least 77% of their pay.
The payment will be based on an employee's normal salary, with the government contribution capped at £697.92 per month.
Example - if someone earning £2,000 a month was working half their hours, they'd get £1,000 normal pay. They would then get £333 extra from their employer and £333 from the government. This is almost the same as the 80% offered under the furlough scheme - but employees have to work at least a third of their hours, instead of zero hours.
What is a 'viable job'?
The Furlough Scheme was an emergency scheme intended to protect almost all jobs during lockdown.
But now that much of the economy has reopened, the government says its replacement will only support ''viable jobs which provide genuine security''.
These are jobs there is a current need for, which aren't simply being propped up by the furlough scheme. Only employees who can work at least a third of their hours will be eligible. This could be, as an example, a café assistant in a café that has started reopening three days a week.
This means those who normally work in venues that are still closed - such as nightclub bouncers, theatre ushers and staff in many live music venues - will miss out, even though they may be required in the long term.
What does the scheme mean for businesses?
At the height of the furlough scheme, the government paid 80% of workers' wages. But under the new scheme it will pay a maximum of just 22%.
The Job Support Scheme will be open to small and medium-sized businesses. Large businesses may also be eligible, if they can prove their revenue has fallen because of coronavirus.
Employees must have been on the firm's payroll since at least 23rd September to qualify and can be moved on and off the scheme, or work different hours however each working arrangement must cover at least seven days.
Workers cannot be made redundant or put on notice while a Jobs Support Scheme grant is being claimed on their behalf.
As with the furlough scheme, employers will be reimbursed by the government after the work has been done.
What other job help is on offer?
The UK government will also give businesses:
£1,000 for every furloughed employee kept on until at least the end of January
£1,500 for every out-of-work 16-24 year-old given a ''high quality'' six-month work placement
£2,000 for every under-25 apprentice taken on until the end of January, or £1,500 for over-25s
Other points from the Chancellor’s latest briefing….
Pay As You Grow
Bounce Back Loans have given over a million small businesses a £38 billion boost to survive the pandemic. To give those businesses more time and greater flexibility to repay their loans, the Government has introduced ‘Pay As You Grow’.
Bounce back loans can now be extended from six to ten years – nearly halving the average monthly repayment.
Businesses that are struggling because of the pandemic can now choose to make interest-only payments.
Anyone in real trouble can apply to suspend repayments altogether for up to six months
No business taking up 'Pay As You Grow' will see their credit rating affected as a result.
Government guarantee extended on Business interruption loans for up to 10 years, making it easier for lenders to give people more time to repay.
Deadline extended until the end of the year on all loans created by the government as a result of the coronavirus pandemic.
Businesses that deferred their VAT bill until the end of March 2021 will now be given the option to spread their bill across 11 smaller
re-payments with 0% interest added.
For the millions of self-assessed income taxpayers who need extra help, they will now be able to extend their outstanding tax bill over
12-months from January 2021.
Hospitality and Tourism businesses VAT rates were due to increase from 5% back to the standard rate of 20% on January the 13th however it has been announced that they will now remain at 5% until 31st March 2021 to help support more than 150,000 businesses and help protect 2.4 million jobs through the winter months.
The Autumn Budget has been scrapped for this year as government has announced that ‘now is not the right time to outline long-term plans’.
For help with payroll, VAT, Tax or any other matters relating to the above information, please do get in touch as we would be delighted to help.
To find out more, visit gov.uk
Disclaimer: The information contained in this article is intended to be a guide and is not intended to be exhaustive. No action should be taken on the basis of information contained herein without obtaining the necessary advice. No responsibility can be accepted for loss or damages occasioned to any person acting or refraining from acting as a result of the material contained herein.