Sep 30, 2020
On 24 September 2020 the Chancellor Rishi Sunak announced a further set of targeted measures to protect jobs and help businesses remain financially feasible as we head into the winter months.
Among the measures, a new Job Support Scheme will help businesses safeguard jobs and bring people back to work and the Self-Employment Income Support Scheme (SEISS) will be extended. The reduction in VAT for businesses operating in hospitality and tourism will also be extended and new payment schemes will ease the burden of paying deferred VAT and Self-Assessment tax liabilities.
The application deadline for the four government-backed loan schemes—CBILS CLBILS, BBLS and Future Fund—has been extended to the end of November. Changes are also being made to the repayment terms for the CBILS and BBLS: the length of the loans can be extended from six years to ten.
New Job Support Scheme
SEISS extended into 2022
15% VAT cut, New Payment Scheme & Time to Pay
BBLS & CBILS loan term can be extended to 10 years
Loan application deadlines extended to end of November
Let’s take a closer look at the measures.
Businesses in receipt of a Bounce Back Loan will be able to pay it back through a Pay as You Grow system. As such, the length of the loan can be extended from six years to ten, reducing repayments by nearly a half. Payment holidays as well as interest-only periods (for up to six months) will be available. CBILS lenders will also be able to extend loans to ten years.
Applications for the CBILS CLBILS, BBLS and Future Fund are to be extended to the end of November to ensure that businesses that need support can access it.
The government’s new Job Support Scheme will launch on 1 November with a view to protecting ‘viable’ jobs for businesses experiencing a decrease in customer demand (due to Covid-19) during winter. It will run for six months and the government will contribute towards the pay of employees who are working fewer hours than usual due to lower demand.
Employers will pay employees for the hours they work. For the hours they don’t work, the government and employer will each contribute a third of their equivalent salary.
Millions of self-employed people will be able to access the SEISS if their trade has been adversely impacted by Covid-19. An initial taxable grant will be available for those who are currently eligible for the scheme and are continuing to trade but are experiencing a decrease in demand. The initial sum worth 20% of average monthly profits (up to £1,875) will cover three months’ of profits for November to the end of January 2021.
Self-employed workers will be able to claim a second grant (subject to adjustment) to cover February 2021 to the end of April 2021.
Businesses operating in the tourism and hospitality sectors will benefit from a continuation of the 15% VAT reduction, in a bid to enable employers to maintain staff as they navigate the impacted trading environment.
The half a million businesses that deferred VAT bills will have the option to pay them back in smaller instalments through the New Payment Scheme. Instead of paying the bill off fully at the end of March 2021, they will be able to make 11 interest-free payments throughout the 2021-22 financial year.
Self-assessment taxpayers can utilise a 12-month extension of the Time to Pay self-service facility. As such, payments deferred from July 2020 and those due in January 2021 will now not need to be paid until January 2022.
If the government-backed coronavirus loans aren’t suitable for your circumstances, you may still be eligible for finance in the form of an unsecured business loan, revolving credit facility, asset finance and more.
As well as partnering with 50 CBILS loan providers, Funding Options work with 100s of lenders providing a vast selection of alternative finance products. Get your quote to see your options.
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