COVID-19: Goverment Announces additional support for business and self employed

The Chancellor has announced additional support for businesses and the self-employed this afternoon.

Broadly the new package includes a new Jobs Support Scheme to protect millions of returning workers, extending the Self Employment Income Support Scheme and 15% VAT cut for the hospitality & tourism sectors and help for businesses in repaying government-backed loans.

In summary, the changes announced:

Jobs Support Scheme

From 1 November, the Jobs Support Scheme will run for six months. Staff must be working at least 33% of hours to qualify for the support. 

How it will work - 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.

Self Employment Income Support Scheme

The Government will continue the Self Employment Income Support Scheme.

How it will work - An initial 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.

This will continue from February to April unless there are some significant changes.

Tax Deferrals

The Government announced it will extend the temporary 15% VAT cut for the tourism and hospitality sectors to the end of March next year.

For those that have deferred VAT payments, the Government has given businesses the option to pay back in instalments. Rather than a lump sum payment in March, you can pay 11 smaller interest free payments.

For self assessment taxpayers, you will be able to benefit from a separate extension to the 'Time To Pay' Scheme. 

Extending loans

The Government announced that those that took out 'Bounce Back Loans' will now be able to pay back over ten years rather than six. There will also be the option to have interest-only periods of up to six months and payment holidays.

For those that accessed the Coronavirus Business Interruption Loan Scheme, lenders will be able to extend the length of loans from a maximum of six years to ten years, if it will help businesses to repay the loan.

The Government will be publishing further guidance on all the changes announced today.