New Job Support Scheme
In case you missed in on the news, we’ve put together some key facts on the new Job Support Scheme that comes in to place on 1st November.
The Chancellor started his speech in the house of commons saying that the furlough scheme was an excellent short term solution to the immediate ramifications of lockdown. While it was right at the time, he has stated that it needs to adapt and evolve to this new normal, stating that over the next 6 months, this virus and restriction are going to be a ‘fact of our lives’.
He went on to say that the primary goal remains the same –
“The primary goal of our economic policy remains unchanged – to support people’s jobs – but the way we achieve that must evolve.”
The Chancellor said that we must nurture recovery to protect jobs. However, he then stated that it is fundamentally wrong to keep people in ‘unviable jobs’. He has therefore devised a new Job Support Scheme that will give direct support to the wages of people in work. The theory is a company can keep the worker employed on shorter hours to save their job and prevent redundancies.
From Sunak’s announcement, the plan is three-fold.
- Supporting viable jobs
- All firms able to use
- Retain the Job Retention Bonus in January in addition to the Job Support Scheme
He will also be extending the self-employed grant under similar terms and conditions.
What are the Key Facts on The Job Support Scheme?
- Under the scheme, the government will subsidise the pay of employees who are working fewer than normal hours due to lower demand
- Anyone employed as of 23 September 2020 will be eligible but employees must not be on a redundancy notice.
- Employees must work at least 33% of their usual hours
- It will apply to staff who can work at least a third of their usual hours
- Employers will pay staff for the hours they do work
- For the hours employees can’t work, the government and the employer will each cover one third of the lost pay
- The grant will be capped at £697.92 per month
- All small and medium sized businesses will be eligible for the scheme
- Larger business will be eligible if their turnover has fallen during the crisis
- It will be open to employers across the UK even if they have not previously used the furlough scheme
- The scheme will run for six months starting in November
Help with Cashflow
To help with cashflow, Sunak has announced there will be more time and flexibility to pay back the bounce back loads, extending the payments over 6 – 10 years, essentially cutting the payments in half. You can also apply to suspend payments IF you meet the criteria and are in ‘real trouble’.
There will also be more time and flexibility on deferred VAT payments. Lump sums of VAT due in March that was deferred can now be split over 11 repayments with no interest being added
In the hospitality and tourism sectors, the plan was to increase VAT back to 20%, but Sunak announced they will cancel that increase until March 31st.
You can read the Chancellor’s full speech here: https://www.gov.uk/government/speeches/chancellor-of-the-exchequer-rishi-sunak-on-the-winter-economy-plan
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