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Chancellor’s ‘Winter Economy Plan’

 

A summary of the key announcements for businesses

New job support scheme

  • Allows employers to keep workers in roles on shorter hours
  • Employees need to work and be paid for at least a third of their usual hours
  • The Government will then cover another third so employees will receive 2/3 of their pay
  • The level of grant will be based on the employee’s salary capped at £697.92 per month
  • All SMEs are eligible larger businesses will need to prove a reduction in turnover
  • This scheme will be open to firms who haven’t previously used the furlough scheme
  • Businesses brining people back from furlough will also be eligible for the job retention bonus
  • Businesses will not be able to issue redundancy notices to employees on the Scheme throughout its duration

This scheme will help to retrain jobs in the region, but this scheme will not cover people on zero-hour contracts or those without regular hours. Heavily impacted sectors such as arts and tourism are also still unable to operate due to public health restrictions which prevent people returning to work. This scheme will provide limited support to those unable to return to a third of their usual hours.

Pay as you Grow

  • More time and flexibility to pay back bounce back loans over 6-10 years and the option to suspend repayments for up to 3 months without impacting credit scores
  • For SMEs using the coronavirus business interruption loans there will be a Government guarantee of up to 10 years to give firms longer to repay loans
  • A successor to the loan guarantee scheme will be announced in January

Self-Employment Income Support Scheme

  • The Government is extending the self-employed grant until 30th April 2021
  • An initial taxable grant will be paid to cover 3 months' worth of profits for the period Nov to Jan next year up to a total of £1875.
  • An additional grant will be paid for Feb to Apr 2021

Tourism and Hospitality

  • The Government is cancelling a planned increase in VAT from 5 to 20%, and is keeping a lower rate of VAT of 5% for hospitality and leisure firms until the 31st March 20221

Self-assessed income tax

  • Self-assessed income tax bills can be spread out over 12 months

VAT deferral:

  • Businesses who deferred their VAT will not have to repay this in a lump sum at the end of March. They will have the option of a re-payment plan. The VAT total can be split into interest-free payments over 11 months.

We recognise that cashflow is a large issue for businesses so helping businesses to repay loans will be beneficial.

However, there is a lack of support for start-ups and encouraging newly formed businesses in these measures who will be crucial for the recovery.

Support for businesses to retrain staff especially around digital sills is still needed as many businesses move more online.

We still need to see funding and support for local testing to ensure we have a functioning track and testing system in the region .In order for the education, health and private sector to recover we need local access to quick and accurate tests.