This article was written by Damian Hinds and published in the Herald group of newspapers on the 1st October:
"Last week the Chancellor announced the Winter Economy Plan – the next phase in the Government’s planned economic response to the pandemic.
With three consecutive months of economic growth and millions of people back to work, there are reasons to be cautiously optimistic, but trading conditions across the winter are likely to remain difficult.
The new Job Support Scheme - which is introduced from the 1st November - is designed to help protect jobs where businesses are facing lower demand over the winter months due to Covid-19. Under the scheme, which will run for six months, the government will contribute towards the wages of employees who are working fewer than normal hours due to a fall in 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 that employees will be paid at least two thirds of their salary per hour for every hour not worked.
Employees must be working at least 33% of their usual hours and the level of grant will be calculated based on an employee’s usual salary, capped at £697.92 per month. Claims will open in December and grants will be paid on a monthly basis from this date
Importantly, the scheme is designed to sit alongside the Jobs Retention Bonus, so businesses can benefit from both schemes in order to help protect viable jobs.
The Chancellor also announced that the Government will continue its support for millions of self-employed individuals by extending the SEISS Grant. Those eligible for the SEISS, and who are actively continuing to trade but are experiencing reduced demand due to Covid-19, will be eligible for a further SEISS Grant to provide support over the winter months.
Grants will be paid in two lump sum instalments each covering 3 months. The first grant will cover a three-month period from the start of November 2020 until the end of January 2021. It will be a taxable grant to cover 20 per cent of average monthly trading profits and capped at £1,875 in total.
An additional second grant - which may be adjusted to respond to changing circumstances - will cover the period from February to the end of April - ensuring support continues right through to next year.
And there is more support for the tourism and hospitality sector, with an extension to the temporary 15% VAT cut to the end of March, which will be welcome news for the thousands of pubs, cafes and restaurants that are adapting to a new trading environment.
The burden will be lifted on more than a million businesses who took out a Bounce Back Loan, with the introduction of a new Pay as You Grow repayment system. This includes extending the length of the loan from six years to ten, and interest-only periods of up to six months and payment holidays will also be available. Lenders through the Coronavirus Business Interruption Loan Scheme would also be able to extend the length of loans from a maximum of six years to ten years.
In addition, the Chancellor announced an extension for applications to loan schemes, including the Coronavirus Business Interruption Loan Scheme (CBIL), the Coronavirus Large Business Interruption Loan Scheme, the Bounce Back Loan Scheme and the Future Fund.
Many people deferred their July Payment on Account tax bill and for anyone unable to make these payments in full in January 2021, they will be able to set up a Time to Pay payment plan of up to 12 months online. And taxpayers with self-assessment tax debts will also be able to access this Time to Pay facility – automatically for debts up to £30,000 and will approval from HMRC for debts over £30,000.
And giving businesses the option to defer VAT payments has been really important, with more than half a million businesses having deferred their payments to March 2021. These businesses will now have the further option to pay this with 11 smaller interest free repayments in the 12 months to March 2022.
These new measures build on the Job Retention Scheme and Self Employment Income Support Scheme - which helped support more than 16,000 jobs across East Hampshire - and the package of grants and loans accessed by hundreds of local businesses. They come at a very important time as we approach winter and more uncertainty – and it is right that more support is in place through what will be a challenging six months."
