key points of winter statement - vat, self employed grants, job support scheme, 10 yrs on bbl loans, delays to paying taxes

The Chancellor yesterday announced a raft of new measures to support businesses in the UK. Below are the key points to help you and your business:

Job Support Scheme - to replace the Furlough scheme

• Government will subsidise the pay of employees who are working fewer than normal hours due to lower demand
  
• Employees must do at least a third (33.3%) of their normal hours
  
• Employers will pay staff for the hours they have work
  
• The government and the employer will pay a third (33.3%) each for the hours they can't work
  
• This means someone working a third of their hours would receive 77% of their pay
  
• The government part of the grant is capped at £697.92 per month per employee
  
• All small & medium sized businesses are eligible for the scheme
  
• It is open to employers even if they have not previously used the furlough scheme
  
• The Job Support scheme will run for six (6) months starting in November 2020 and replaces the "furlough" scheme
  
• Basically means the government will pay a maximum of 22% of someone's wages, down from 80% at the start of the furlough policy
  

Example:

If an employee (e.g. Mr Bob Smith) works reduced hours the employer pays for that. And in addition the employer and government pay one third of the lost pay each (up to the cap £697.92).

So if Mr Bob Smith normally worked for an employer at £2,000 a month, and then worked 50% hours, he would get £1,000 normal pay plus £333 extra from their employer and £333 from the government.


Self Employed Support - SEISS Grants

• A grant will be available to those eligible for the Self Employment Income Support Scheme Grant (SEISS) previously ie basically a 3rd SEISS grant payout and possibly a 4th
  
• The grant will cover three months' worth of profits for the period from November 2020 to the end of January 2021
  
• It will cover 20% of average monthly profits up to a total of £1,875 (previously £6750 and £7500)
  
• A further grant may be available to the self-employed to cover February 2021 to the end of April 2021, depending on circumstances
  

Bounce Back (BBL) Loans and Covid (CBILS) Loans - time extended from 6 to 10 years to repay + chance to pay interest only

• Bounce Back Loans will be extended from 6 to 10 years, cutting down monthly repayments by nearly a half per month after the 12 month interest free period - may need to apply to your bank for this
  
• Coronavirus Business Interruption Loan Scheme lenders will also be able to extend the length of loans from the current maximum of 6 to 10 years - may need to apply to your bank for this
  
• Extension of deadline for the government's coronavirus loan schemes to the end of November 2020
  
• Businesses that are struggling can choose to make interest only payments for six months and those "in real trouble" can apply to suspend repayments altogether for six months - will need to apply to bank to get this - businesses will not see their credit rating fall as a result, the Chancellor said.

Tax - 5% VAT to remain longer, VAT deferred interest free payments, more time to pay HMRC

• The 15% emergency VAT cut for the tourism and hospitality industries will be extended from January 2021 to 31 March 2021
  
• Businesses who deferred their VAT bills will be able to pay back their taxes in 11 smaller interest-free instalments - this will need to be requested to HMRC VAT dept
  
• Self-assessment income taxpayers who need help will be given more time to pay tax bills - again need to request from HMRC prior to deadline
  

By Anni Khan at Tax Affinity Accountants

Tax Affinity Accountants are experts in Tax and Accountancy. With branches in Worcester Park and Kingston upon Thames and Epsom and Ewell they are considered in the Industry to be expert business accountants and tax advisors for small and medium sized businesses (SME's). Helping and supporting limited company owners and self employed people throughout the UK, they regularly help clients grow their business providing tailored advice and support. Their support has been considered invaluable by many clients and key to their success.

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