Covid 19 business support : Chancellor Rishi Sunak sets out plans for a job support scheme to replace furlough
London — Chancellor Rishi Sunak has delivered a statement setting out plans to help workers and businesses hit by new coronavirus restrictions.
It includes plans for a job support scheme to replace furlough, help for the self employed, business loans and VAT cuts.
- A new jobs support scheme – which will replace furlough – will see the government “directly support” the wages of people in “viable” jobs working at least a third of their normal hours
- The government will top up a third of the worker’s salary that would have otherwise been lost as a result of working reduced hours – capped at £697.92 a month – which means a third will go unpaid
- It will start in November and run for six months – with all small and medium-sized businesses eligible for the scheme
- Larger firms will have to prove their profits have been affected by the COVID-19 pandemic in order to utilise it
- Businesses will not be able to issue redundancy notices to employees while taking part in this scheme
- The self-employed grant will be extended on similar terms as this new support scheme
- A “pay as you grow” scheme to allow companies more time to repay bounce back loans over a period of up to 10 years rather than six
- Those struggling to pay them back will now be able to choose to make interest-only repayments and “anyone in real trouble” can suspend repayments altogether for up to six months
- VAT will remain at 5% for hospitality and tourism until 31 March 2021 – rather than reverting back to 20% in January
- The deadline for taking out a coronavirus business interruption loan will be extended until 30 November, with the government guarantee on them extended for up to 10 years ( Expert from Sky news )
The Institute for Fiscal Studies think tank has said the new Job Support Scheme is “significantly less generous” than the preceding furlough system.