SUMMARY OF WINTER ECONOMY PLAN 2020
Incase you missed it, here’s a quick summary of the Government’s Winter Economy Plan 2020, to get your head around all the financial help there is for UK businesses during these unprecedented times.
SELF-ASSESSMENT TAX DEFERRAL
The government are giving more time to pay taxes due in January 2021, building on the Self-Assessment deferral provided in July 2020.
Taxpayers with up to £30,000 of Self-Assessment liabilities due will be able to use HMRC’s self-service ‘Time to Pay’ facility to secure a plan to pay over an additional 12 months.
This means that Self-Assessment liabilities due in July 2020 will not need to be paid in full until January 2022.
Any Self-Assessment taxpayer not able to pay their tax bill on time, including those who cannot use the online service, can continue to use HMRC’s Time to Pay Self-Assessment helpline to agree a payment plan.
PAY AS YOU GROW
The government will give all businesses that borrowed under the Bounce Back Loan Scheme (BBLS) the option to repay their loan over a period of up to ten years.
This will reduce their average monthly repayments on the loan by almost half.
UK businesses will also have the option to move temporarily to interest-only payments for periods of up to six months (an option which they can use up to three times), or to pause their repayments entirely for up to six months (an option they can use once and only after having made six payments).
These changes will provide greater flexibility to repay these loans over a longer period and in a way that better suits businesses’ individual circumstances.
Coronavirus Job Support Scheme (CJSS) EXTENSION
The Furlough Scheme, this helps support viable UK employers who face a lower demand due to COVID-19, and aims to keep their employees attached to the workforce.
The scheme will remain open until 30 April 2021.
For claim periods running to January 2021, employees will receive 80% of their usual salary for hours not worked, up to a maximum of £2,500 per month. The £2,500 cap is proportional to the hours not worked.
To continue supporting the cashflow and viability of over 150,000 UK businesses and to protect 2.4 million jobs, the government is extending the temporary reduced rate of vat (5%) from 12th January to 31st March 2021.
This will continue to apply to supplies of food and non-alcoholic drinks from restaurants, pubs, bars, cafés and similar premises, supplies of accommodation and admission to attractions across the UK.
Self-Employed Income Support Scheme (SEISS) GRANT EXTENSION
This policy was withdrawn by the government on 25th November 2020.
Coronavirus Business Interruption Loan Scheme (CBILS)
The scheme provides loans of up to £5 million with an 80% government guarantee to the lender, giving lenders the confidence to provide finance to SMEs.
The government does not charge businesses for this guarantee and also covers the first twelve months of interest payments and fees.
For LARGE companies, the scheme provides loans of up to £200 million, with an 80% government guarantee to the lender, which is more generous than equivalent schemes in many other countries.
TALK TO US
If you would like any advice regarding any of the above policies, we’re here to help you. Get in touch with us by telephone, email or via our contact form.