The Government's Winter Economy Plan

This Winter Economy Plan focuses on

1. a new Job Support Scheme to extend the furlough scheme,
2. an extension to the Self Employment Income Support Scheme Grant (SEISS),
3. an extension to the reduced VAT rate period in the hospitality sector,
4. an extension to the period of deferral for VAT
5. an extension to the period of deferral for self-assessment tax payments,
6. extensions to the Bounce Back Loan and Coronavirus Business Interruption Loan Scheme repayment periods and
7. extensions to the government's coronavirus loan schemes application deadlines.

The known details provided by The Treasury are below but please note more details will be published in due course.

Also, please note that if you were thinking of taking advantage of the new Kickstart Scheme that aims to create work placements for young people who are at risk of becoming unemployed for the long-term but do not meet the criteria of a minimum of 30 new employees to apply, you can be added to our list of businesses looking to work together to meet the 30 person criteria as a group.

Support for workers

A new Job Support Scheme will be introduced from 1 November to protect viable jobs in businesses who are facing lower demand over the winter months due to coronavirus.

Under the scheme, which will run for six months and help keep employees attached to the workforce, the government will contribute towards the wages of employees who are working fewer than normal hours due to decreased demand.

Employers will continue to pay the wages of staff for the hours they work - but for the hours not worked, the government and the employer will each pay one third of their equivalent salary.

This means employees who can only go back to work on shorter time will still be paid two thirds of the hours for those hours they can't work.

In order to support only viable jobs, employees must be working at least 33% of their usual hours. The level of grant will be calculated based on employee's usual salary, capped at £697.92 per month.

The Job Support Scheme will be open to businesses across the UK even if they have not previously used the furlough scheme, with further guidance being published in due course.

It is designed to sit alongside the Jobs Retention Bonus and could be worth over 60% of average wages of workers who have been furloughed – and are kept on until the start of February 2021. Businesses can benefit from both schemes in order to help protect jobs.

Support for the self-employed

The Government is continuing its support for millions of self-employed individuals by extending the Self Employment Income Support Scheme Grant (SEISS). There will be two more grants in addition to the current scheme that provides two grants – the second of which is still available until 19 October 2020.

The first new taxable grant will be provided to those who are currently eligible for SEISS and are continuing to actively trade but face reduced demand due to coronavirus. The initial lump sum will cover three months' worth of profits for the period from November to the end of January next year. This is worth 20% of average monthly profits, up to a total of £1,875.

The second grant, which may be adjusted to respond to changing circumstances, will be available for self-employed individuals to cover the period from February 2021 to the end of April 2021.

Tax cuts and deferrals

As part of the package, the government announced it will extend the temporary 15% VAT cut for the tourism and hospitality sectors to the end of March 2021.

Up to half a million businesses who deferred their VAT bills will be given more breathing space through the New Payment Scheme, which gives them the option to pay back the VAT 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.

Around 11 million 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

The burden will be lifted on more than a million businesses who took out a Bounce Back Loan through a new Pay as You Grow flexible repayment system. This will provide flexibility for firms repaying a Bounce Back Loan.

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. These measures will further protect jobs by helping businesses recover from the pandemic.

Coronavirus Business Interruption Loan Scheme lenders will get 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.

Applications for the government's coronavirus loan schemes will be extended until the end of November so more businesses will be able to apply for the Coronavirus Business Interruption Loan Scheme, the Coronavirus Large Business Interruption Loan Scheme, the Bounce Back Loan Scheme and the Future Fund.