Today the Chancellor introduced a new Job Support Scheme (JSS) to help businesses and employees through to 30th April 2021. In addition to the JSS, the Chancellor announced an extension of the Self Employed Income Support Scheme (SEISS) and funding support for businesses. We are still waiting for full details but here is what we know so far:
Job Support Scheme
- The JSS will apply from 1st November 2020 only to ‘viable jobs’;
- Viable jobs mean where employees work at least 1/3rd of their usual working hours;
- The hours they work will be paid for by their employers at their full salary;
- The non-worked hours will be paid 33.3% by the Government (capped at £697.92 per month), 33.3% by the employer and 33% will be unpaid;
- Employers will not be permitted to make employees redundant whilst covered by the JSS. Further details to follow in due course;
- Businesses do not need to have made any claims under the previous furlough schemes, although it is unclear from which date they need to have been employed from;
- Employers are able to claim the JSS in addition to the Job Retention Bonus Scheme;
- This new scheme is open to all SMEs and to larger firms whose turnover has been significantly impacted by COVID-19.
While this scheme is welcomed, it transfers a larger obligation to the employer and also leaves the employee with a higher percentage unpaid. Employers will need to consider their HR plans carefully and the impact of the additional payroll costs of JSS. If you would like to discuss your options, please contact email@example.com to arrange a free consultation.
Other Measures Announced
- The extension of the SEISS will provide a grant of 20% of normal monthly profits and the first three-month grant is capped at £1,875. No further details are available at this time;
- Increased flexibility on Bounce Back Loans with an extension of the repayment period from 6 to 10 years, which will cut monthly debt repayments. In addition, interest-only periods of up to 6 months and payment holidays will be made available to businesses;
- Coronavirus Business Interruption Loan Scheme lenders will be able to extend the length of loans to businesses from 6 years to 10;
- Deferred VAT liabilities from last summer due to be settled in March 2021 can now be paid over 11 monthly payments with no interest payable;
- The self-assessment tax payment due on 31st July 2020 which was deferred until 31st January 2021 can now be deferred until 31st January 2022, but this has to be agreed with HMRC and is not automatic;
- The reduced VAT rate of 5% for the Hospitality and Tourism sector has been extended from 13th January 2021 to 31st March 2021.
Contact your TC partner now on 0330 088 7111 if you’d like to discuss the cash flow support measures and what that means for your businesses.
As always, further guidance from us will follow as and when details are announced.