The government has announced new support for workers affected by the pandemic.
The Self-Employment Income Support Scheme, which was due to end on 31 October, will be extended from 1 November. The extension will provide two grants, paid in lump sum instalments, covering November 2020 to April 2021.
The first grant covers November until the end of January. HMRC will provide a taxable grant covering 20 per cent of average monthly trading profits, paid out in a single instalment covering three months of profits and capped at £1,875 in total.
The second grant will cover from the start of February until the end of April. The level of the second grant has not been confirmed.
The grants are subject to Income Tax and National Insurance Contributions.
The government has also announced details of a new Job Support Scheme, which will replace the Coronavirus Job Retention (furlough) Scheme. It’s designed to protect jobs facing lower demand during the winter months.
Under the scheme, companies will continue to pay employees for time worked, but the cost of hours not worked will be split between the employer, the government (through wage support) and the employee (through a wage reduction), helping employees keep their jobs.
The scheme will launch on 1 November 2020 and run for six months.
Businesses will also have flexibilities under the new measures, following the government’s decision to:
- Extend the temporary 15% VAT cut for the tourism and hospitality sectors until the end of March 2021.
- Give up to half a million business who deferred their VAT bills the option to pay back in 11 smaller interest free instalments during the 2021-2022 financial year, rather than a lump sum in full at the end of March 2021.
Introduce a new flexible ‘Pay as You Grow’ flexible repayment system for repaying Bounce Back Loans, including extending the length of the loan, offering interest-only periods and payment holidays.