Agencies and businesses offered new tax and jobs schemes
Chancellor Rishi Sunak has outlined his measures to help agencies and other businesses survive Coronavirus.
His announcements - endorsed by both the CBI and the TUC - came with a warning that the current restrictions and virus-related challenges will be lasting “at least six months”. His specific measures include:
- confirmation the furlough scheme will conclude at the end of October;
- this will be replaced by a new Jobs Support Scheme (JSS), starting in November, focussing on employers who choose to keep staff on shorter hours rather than making them redundant;
- under the JSS employees must work at least a third of normal hours and be paid for those hours by employers, and the government will the contribute some of the remaining pay;
- the Treasury calculates that most workers on shorter hours should be able to achieve 77 per cent of pre-Covid income thanks to JSS combining state payments and employers' contributions;
- JSS is aimed at firms classed as smaller and medium sized businesses, but only those larger firms that show reduced income;
- the JSS will be open across the UK and apply to firms even if they have not taken advantage of the furlough scheme;
- the Jobs Retention Bonus of £1,000 - already announced and due in late January - remains in place for companies employing staff who were once furloughed;
- those businesses that have borrowed under the Bounce Back Loan Scheme will have more flexibility on repayment terms - up to 10 years in some cases, under a new government 'Pay As You Grow' initiative;
- the application deadline for all Coronavirus loan schemes, including the Future Fund, have been extended to November 30;
- businesses which deferred VAT payments will no longer have to pay a lump sum at the end of March 2021 - they will have an option of splitting it into smaller interest-free repayments over the course of 11 months;
- any self-assessed income tax payers who need extra help can also now extend their outstanding tax bill over 12 months from January;
- finally the hospitality and tourism sectors were expecting their temporary VAT reduction (from 20 to five per cent) to end in January, but it will now conclude at the end of March instead.
Sunak says his plans strike “a finely-judged balance” between health and business priorities, and respond to “people being exhausted” by the effects of the pandemic.