Chancellor unveils business support measures

 Chancellor unveils business support measures

Rishi Sunak this afternoon announced new measures to support businesses in his “winter economy plan” including an extended jobs support scheme.
The main points in the Chancellor’s House of Commons statement were:
Job Support Scheme

• Six-month scheme starting 1 November.
• To be eligible, employees work a minimum of 33 per cent of their hours.
• For the remaining hours not worked, the Government and employer pay a third of their wages each.
• So employees working 33 per cent of their hours will receive at least 77 per cent of their pay.
• All SMEs eligible, larger only where turnover fallen through crisis.
• Open to employers even if they haven’t used furlough scheme. Employers can claim support scheme and CJRS bonus.

VAT Deferral

• Businesses who deferred their VAT will no longer have to pay a lump sum at the end of March next year. They will have the option of splitting it into smaller, interest free payments over the course of 11 months - benefitting up to half a million businesses.
• Any of the millions of self-assessed income taxpayers who need extra help, can also now extend their outstanding tax bill over 12 months from January.
• To continue supporting over 150,000 businesses and protect 2.4 million jobs, the Government has extended the 15 per cent VAT cut for the tourism and hospitality sectors to the end of March next year

 
Bounce Back Loans

• The application deadline for all coronavirus loan schemes – including the future fund - has been extended to 30 November ensuring even more businesses can benefit from government-backed support.
• Can be extended from 6 to 10 years. Struggling businesses can choose for interest only or up to six months suspended payments with no credit rating impact.

 
Pay as you Grow

• More than one million businesses which have borrowed under the Bounce Back Loan Scheme will be offered the choice of more time and greater flexibility for their repayments.
• Lenders have been enabled to offer Coronavirus Business Interruption Loan Scheme borrowers more time to make their repayments where needed.

 
Self Employment Income Support Scheme

• The Self-Employment Income Support Scheme extension will support viable traders who are facing reduced demand over the winter months, covering 20 per cent of average monthly trading profits via a government grant (extended to 30 April, 2021)

 
Mr Sunak acknowledged that he “cannot save every business, cannot save every job” but said he would to deal with the problems businesses are facing now. The Chancellor said he would support viable jobs.
 
Paul Faulkner (pictured), chief executive of Greater Birmingham Chambers of Commerce (GBCC) said: “The Chancellor made his intentions clear from the outset of his announcement this afternoon –the business landscape has completely altered since the start of March.

"The new measures announced today reflect the underlying fragility we face as a society as the Government attempts to revive the economy whilst also containing the spread of Covid-19.

“It’s pleasing to see the Chancellor has listened to the concerns shared by thousands of businesses across the country and recognised that strong measures needed to be taken to avoid a disastrous escalation of the unemployment rate over the winter months.

“Firstly, the flagship wage subsidy plan forms the backbone of Mr Sunak’s winter plan and whilst we await on the specific policy details, its reassuring to see that the scheme will help preserve viable jobs and offers a degree of reassurance to those employers facing the harsh prospect of either retaining staff or making them redundant.

“The wider eligibility of the plan (compared to the original furlough scheme) is also good to see given the number of businesses which fell through the cracks and weren’t able to access the original programme.
“Prolonging the loans schemes and lengthening their payment terms along with extending the VAT Deferral Scheme also makes complete sense – as data from our Quarterly Business Report regularly highlights, firms across the region are facing severe issues related to finance and levels of debt and hopefully this policy will help to alleviate these concerns in the medium term.

“Nevertheless, the Chancellor could have gone further in tackling these structural issues and hopefully we will see a reduction in the employer National Insurance Contributions along with a reform of our outmoded corporate tax system in the near future.

“From a broader perspective, it’s also disappointing to see a lack of reference to the large scale interventions which are required for the sectors which have been hardest hit, despite the promises made by the PM earlier in the week.

“As we have seen throughout this crisis when large scale measures are announced, such as these today, there also tend to be gaps in support that quickly emerge, be they intended or simply oversights.  The Chamber will continue to speak with our members and the wider business community to identify such issues and lobby for additional support where needed.

“Finally, if you are unsure about what the latest measures mean for your business, I would encourage you to visit our Covid-19 Hub which includes further details on what the schemes will entail and how you can access them."