28th September 2020
Covid-19 Update 25th September
We have two key announcements this week, please find details below of the key points which may affect you.
Return to working from home
In response to the working from home guidance this week, we will continue to adopt a working from home approach. However we will continue with a skeletal staff in the office, meaning the office will remain open during normal hours.
Rishi Sunak cancelled the autumn budget and put together a Winter economy plan which was announced yesterday. The plan provided details of further government aid to help through the COVID pandemic. As always, we await the detail but please find below a summary of the key points:
Job Support Scheme
This will mean that staff can be asked to work reduced hours with the Government will pay 1/3rd of hours not worked from the 1st November 2020.
There is good guidance with worked examples of how this will work, see the link below:
The furlough scheme will cease at the end of October as previously advised. However, the “Job Support Scheme will be launched in its place to help viable businesses. Employees will have to work at least a third of their usual hours, with the other two thirds of their salary being paid jointly by the government and employer.
The new scheme will be open to all businesses, even if they haven’t previously used the furlough scheme.
Employers using the Job Support Scheme will still be eligible for the bonus payable for bringing furloughed employees back to work.
Self Employed Income Support Scheme (SEISS)
The self employed income support scheme grants will be extended to April 2021 with a further two taxable grants available for November to January 2021 and February to April 2021.
The first grant will be calculated at 20% of average trading profits, capped at £1,875.
Details on the second grant haven’t yet been announced.
Bounce Back Loans and CBIL Loans
Under a ‘pay as you grow’ initiative, the Bounce Back Loan repayment terms can be extended from 6 years to 10 years.
Borrowers will be able to repay just the interest or, in cashflow tight times, they can apply to suspend repayments altogether for a period of 6 months. This will have no affect on credit history.
The government guarantee on CBIL loans will be increased to 10 years to provide reassurance to lenders, and the deadline for loan applications will be extended to 30 November. A new scheme will be put in place from January 2021.
Any vat liabilities arising from March 2020 to June 2020 that were deferred to March 2021 will now be able to be over 11 months, interest free.
Self assessment liabilities deferred from July 2020 and including liabilities due in January 2021 can also be paid over a longer of 12 months. It is not yet clear whether interest would be charged.
The current reduction in VAT to 5% for the hospitality and tourism industry, will be extended to 31st March 2021.
Further guidance on the above measures
As I have said in previous emails I would encourage you all to look at using the measures being made available to maximise your cash reserves. My comments before about creating a "war chest" I feel are still very relevant. As we have already seen since March we continue to face a very uncertain time with restrictions seeming to be constantly changing this can only lead to a very tricky time for us all.