Will The Winter Economy Plan Save The Day?

If you’re a Game of Thrones fan, you’ll know the phrase “Winter is Coming” only too well. Right now, autumn has arrived with a wind from the north meaning winter is just around the corner. This afternoon in Westeros… sorry Westminster, Chancellor of the Exchequer Rishi Sunak outlined his Winter Economy Plan.

The Chancellor’s Winter Economy Plan includes the Job Support Scheme. This replaces furlough and is to try to keep businesses afloat through the toughest months of the year, but will it keep the White Walkers and the wolves from the door? Let’s take a closer look… as always during these challenging times, getting the information out to you is an ongoing process, but here’s what we know so far about how the Winter Economy Plan job support scheme may help small to medium-sized businesses just like yours.

Support for Workers

  • From the 1st November 2020, the Job Support Scheme will be introduced.
  • This scheme will last for 6 months
  • Employees must be working 33% of their usual hours
  • There is a cap of £697.92 
  • The total amount an employee will receive is 77% of their usual pay.
  • Employer will contribute 55%
  • The Government will contribute 22%
  • It is designed to sit alongside the Jobs Retention Bonus 
This is what the Winter Economy Plan looks like. We love a pie chart!

As you’ll no doubt have worked out already the idea behind the Winter Economy Plan is to spread the available amount of work between workers.

Self Employed

  • From the 1st November, the Job Support Scheme will be introduced.
  • This scheme will last for 6 months
  • 1st Grant will be from November to January  2021
  • This is worth 20% of average monthly profits, up to a total of £1,875.
  • 2nd Grant will be from February to April 2021
  • The second grant will be adjusted to respond to changing circumstances.

Tax Cuts and Deferrals

  • As part of the package, the government also announced it will extend the temporary 15% VAT cut for the tourism and hospitality sectors to the end of March next year.
  • VAT bills will be given more breathing space through the New Payment Scheme, which gives them the option to pay back in smaller instalments. Rather than paying a lump sum in full at the end March next year, they will be able to make 11 smaller interest-free payments during the 2021-22 financial year.
  • self-assessment taxpayers will be able to benefit from a separate additional 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, will now not need to be paid until January 2022.

Giving Businesses Flexibility to Pay Back Loans

  • This includes extending the length of the loan from six years to ten, which will cut monthly repayments by nearly half.
  • Interest-only periods of up to six months and payment holidays will also be available to businesses.
  • Coronavirus Business Interruption Loan Scheme lenders the ability to extend the length of loans from a maximum of six years to ten years if it will help businesses to repay the loan.
  • Extending applications for the government’s coronavirus loan schemes that are helping over a million businesses until the end of November. 

Hopefully, our quick blog post on the Winter Economy Plan job support scheme will help you understand what measures the government is offering in response to the Coronavirus to help you through the long, hard winter months. However, if you would like to know more about the Winter Economy Plan or discuss the job support scheme, please email us on [email protected], visit our website or give us a call us on 02382025160.

Take care and stay safe.

Roll on spring!

Kate, Pete, Becca and Hannah

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