Days after revealing that the Autumn Budget would not be going ahead, Rishi Sunak delivered a statement setting out his post-furlough plans as well as further support for those businesses and individuals facing new restrictions.
From loan updates and payment deferrals to help with wages, much of the Chancellor’s statement will impact small businesses and self-employed professionals. So, in this piece, we highlight the announcements that you need to know about and what exactly they mean.
The Job Support Scheme
With the furlough scheme coming to an end, Rishi Sunak confirmed the government will top up wages for those on reduced hours. Starting from 1st November, employers will pay the wages of staff for the hours they work – which must be at least a third of their normal hours. For the hours not worked, employers and the government will both pay one third of the equivalent salary. The grant will be capped at £697.92 per month but all small and medium-sized enterprises are eligible – whether or not they used the furlough scheme. This new initiative has been designed to sit alongside the Job Retention Bonus.
Similar support for the self-employed is also set to be announced. Those who were eligible for the Self Employment Income Support Scheme will have access to a grant covering 20% of average monthly profits – up to a total of £1,875 – from November to the end of January. It’s thought that another grant will then be available for February to April.
Business loans
A new Pay as You Grow repayment plan will give businesses more flexibility when it comes to repaying their Bounce Back Loans. The length of the loan will be extended from six years to 10 – cutting the monthly repayments by almost half. Payment holidays and interest-only periods will also be available and organisations won’t see their credit rating affected.
The same payment plan was confirmed for the Coronavirus Business Interruption Loan Scheme – giving lenders the option to extend the length of loans from six to 10. Application deadlines for this have been extended to the end of November too.
Taxes
Another key announcement was the extension of the 15% emergency VAT cut. The tourism and hospitality sectors will not only see this extended from January 2021 until March 2021 – but those who deferred VAT bills will benefit from a New Payment Scheme which means they can pay back taxes over the year in smaller interest-free instalments.
In a final bid to help those who are self-employed, it was also revealed that self-assessment income taxpayers will be given a payment extension. Time to Pay means payments deferred from July 2020 and those due in January 2021 will now not be due until January 2022.
How we can help
Whether you need a little advice regarding the above announcements or simply want to strike accounting off your to-do list, our team at Bright Ideas Accountancy is here. Dealing with your finance and accounts can be tricky at the best of times – let alone when there is so much to keep up with.
From VAT returns and bookkeeping support to financial planning and compliance, Bright Ideas Accountancy could be exactly what you need.
Get in touch with our supportive team today by calling us on 0161 669 4221, emailing info@biaccountancy.com, or filling in our online contact form.
