The Chancellor of the Exchequer has made a statement in the House of Commons on the Government’s economic plan for the winter period. The key announcements include:

Chancellor's Economic Statement

The Chancellor of the Exchequer has made a statement in the House of Commons on the Government’s economic plan for the winter period. The key announcements include:

  • A New Job Support Scheme. The Government will directly support the wages of people in work, in viable jobs. Employees must be working at least a third of their normal hours and be paid for that work, as normal, by their employer. The Government and the employer will each cover one third of the pay an employee has lost by reducing their working hours.
  • Anyone who as of yesterday is employed is eligible.
    o The Scheme will start in November and run for six months.
    o All small and medium sized businesses are eligible to apply. Larger businesses may be able to apply but only when their turnover has fallen.
    o All businesses are eligible, even if they have not previously utilised the furlough scheme.
    o Employers who retain furloughed staff on shorter hours will be able to claim both the Jobs Support Scheme and the Jobs Retention Bonus.
  • The Chancellor also announced that the Self-Employment Income Support Scheme will be extended on ‘similar terms’ to the Job Support Scheme.
  • The Chancellor announced a ‘Pay as You Grow’ scheme for businesses which took out government guaranteed loans during the crisis allowing. Loans taken out under the Bounce Back Loan Scheme or the Coronavirus Business Interruption Loan Scheme (CBILS) can be extended from six to ten years. Businesses who are struggling can choose to make interest only payments and can apply to suspend repayments altogether for up to six months.
  • The application deadline for all CBILS loans has been extended to 30 November 2020.
  • Businesses who deferred their VAT will no longer have to pay a lump sum at the end of March 2021. They will have the option of splitting it into smaller, interest free, payments over the course of 11 months. Any self-assessed income taxpayers will also be able to extend their outstanding tax bill over 12 months from January 2021.
  • The Government has extended the 15 per cent VAT cut for the tourism and hospitality sectors to the end of March next year.

A press release from HM Treasury can be found here.

For further guidance on changes see here.