The Chancellor’s 2020 Winter Economy Plan
We are delighted to provide our summary of the key announcements in the Chancellor’s Winter Economy Plan on 24 September 2020.
In his statement, Rishi Sunak announced the next stage of help and support for jobs and businesses. The aim is to steer the economy through what he described as a “difficult winter” after the hard decision to end the furlough scheme.
Mr Sunak announced the following main measures:
A new Jobs Support Scheme
Under the scheme, eligible employees will be expected to work for at least one third of their normal hours and be paid for that by their employer. The government and the employer will then each pay one third of the employee’s usual pay rate for the hours not worked. This is targeted at sustaining “viable jobs”. All small and medium sized businesses will qualify as will certain large firms if their turnover has fallen due to the pandemic. The scheme will run for six months from November.
Help with businesses’ cash flow will come from extensions to the Bounce Back Loan Scheme and other initiatives. New and existing borrowers of bounce-back loans will be able to extend their repayment periods from six to ten years under a ‘Pay As You Grow’ measure. Struggling businesses will be able to switch to interest-only payments and some will be able to suspend payments altogether for up to six months.
The government guarantee for Coronavirus interruption loans will also be extended to ten years. The application deadline for all the main loan schemes will be extended to the end of November.
The deferred VAT and self-assessment payments due early next year can be repayable in instalments rather than as a lump sum.
Hospitality and leisure
The lower 5% VAT rate for hospitality and tourism will be extended to 31 March 2021.
Please click on the link below to view the full copy of the statement.