Updated on 24 September 2020
Chancellor Rishi Sunak has delivered a statement today setting out plans to help workers and businesses hit by new coronavirus restrictions.
It includes plans for a jobs support scheme to replace furlough, help for the self-employed, business loans and VAT cuts.
Details of the announcements for the new Jobs Support Scheme are here.
Support for the Self-employed
The Chancellor has announced that the self-employment income support scheme (SEISS) will be extended to support viable traders who are facing reduced demand over the winter months, covering 20% of average monthly trading profits via a government grant.
The initial lump sum will cover three months’ worth of profits for the period from November to the end of January next year. This is worth up to a total of £1,875.
An additional second grant, which may be adjusted to respond to changing circumstances, will be available for self-employed individuals to cover the period from February 2021 to the end of April.
Business loans
The Treasury will provide support for lenders so they can offer coronavirus business interruption loan scheme (CBILS) borrowers more time to make their repayments where needed.
Businesses who are struggling can make interest only payments or suspend payments completely for six months.
Bounceback loans, which have given £38bn to over a million small businesses, will be paid back through a ‘pay as you grow’ scheme, extending terms from six to 10 years. Interest-only periods of up to six months and payment holidays will also be available to businesses.
The application deadline for all coronavirus loan schemes – including the Future Fund - has been extended to 30 November.
The Chancellor says that businesses will not see their credit ratings fall as a result of availing these announcements.
Taxes
The government has extended the 15% VAT cut for the tourism and hospitality sectors to the end of March next year.
Up to half a million business who deferred their VAT bills will be given more breathing space through the new payment scheme, which gives them the option to pay back in smaller instalments. Rather than paying a lump sum in full at the end March next year, they will be able to make 11 smaller interest-free payments during the 2021-22 financial year.
On top of this, around 11m self-assessment taxpayers will be able to benefit from a separate additional 12-month extension from HMRC on the time to pay self-service facility, meaning payments deferred from July 2020, and those due in January 2021, will now not need to be paid until January 2022.