Last week the Treasury announced new measures whose aim is to support the UK economy after October, amongst these a new Job Support Scheme.
New Job Support Scheme to retain viable employees. By viable it is expected that these employees will work at least 1/3 of their normal hours. The remaining hours will be paid 1/3 by the employer and 1/3 by the Treasury leaving the employee at most 22.22% worse off than if they worked their normal hours. This applies from November 1st and for 6 months. Eligible businesses are SMEs and large businesses which have seen their turnover drop during the crisis. Employees using the Job Support Scheme would be able to also take advantage of the Job Retention Scheme we had written about here.
VAT relief: VAT due for the March and June period and had been deferred until March 2021 can now be spread in monthly instalments to be paid by March 2022 and without incurring any interest or penalty. Importantly, in order to take advantage of this provisions a business must opt-in. VAT in hospitality and tourism will remain at 5% for an extra 3 months, ie. till 31st March 2021.
Restrictions to winding up petitions, which were due to terminate in September, are extended to 31st March 2021. However, it should be noted that the adjustment to wrongful trading provisions that had been introduced in March 2020, are not extended and, thus, directors need to be very careful not to fall foul of these provisions by continuing to trade in circumstances that the law says they should not.
Government loan schemes, such as the Bounce Back Loan and the Coronavirus Business Interruption Loan Scheme, will end as planned and are to be replaced with new successor programmes from January 2021. These programmes are yet to be announced but we will keep you updated as and when they are.
Source: UK Government
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