Hero background
Budget stuff, business finance, Business Services, Coronavirus Advice, government, Small Business

Covid Business Support: How could you benefit from the Winter Economy Plan?

RJP LLP By RJP LLP
Covid Business Support: How could you benefit from the Winter Economy Plan?

Rishi Sunak cancelled his Autumn Budget. The host of measures (including tax increases) to recoup the large investment made in supporting the UK economy are on hold, for now at least.

Instead the Chancellor unveiled a range of emergency initiatives today, as part of his Winter Economy Plan. These are intended to offer a replacement to the furlough scheme and help UK businesses and taxpayers through what will inevitably be a very challenging next 6 months. The government is being very vocal about only being able to support businesses that are able to survive, hence the emphasis on contributing to wage top ups rather than a full subsidy like the furlough scheme.

What’s in the Winter Economy Plan?

Here are the key measures announced, with details of how and when to access them where applicable.

  1. New Job Support Scheme

Designed to avoid mass redundancies and unemployment when the furlough scheme ends, the new Job Support Scheme will involve the government supporting the wages of people working part-time from November.

It means that full time workers can go back to their workplaces on a part-time basis and, provided they are working for at least a third of their normal hours and being paid accordingly, the government will make a contribution to top-up their lost earnings.

For any regular hours that cannot be worked due to a decline in demand, the government and the employer will jointly pay a third each of the usual wage for that employee. The government contribution will be capped at £697.92 a month. In effect employers will need to be paying two thirds of their employees’ wages, one third of which can be in return for work actually completed, to qualify for the remaining third to be topped up by the Treasury.

The new Job Support Scheme will run for six months and is open to all small and medium sized businesses (SMEs) and their employees, regardless of whether they used the furlough scheme or not. The initial phase of the scheme will run from November 2020 to January 2021, with a second phase from February 2021 to April 2021.

Large businesses may be eligible to benefit too, provided their revenues have fallen below a minimum threshold.

The Job Support Scheme will commence from November. The current CJRS (furlough scheme will end on 31 October 2020). Full details will be made available once more information is released.

Here is a helpful resource published by the government, explaining how the scheme will operate: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/921389/Job_Support_Scheme_Factsheet.pdf

  1. More support for self-employed workers

Self-employed workers will also have access to the Job Support Scheme and can claim for lost earnings too. The scheme will operate slightly differently, they will be able to claim a grant for up to 20% of average monthly profits, to a maximum of £1,875. These grants will also be available for November 2020 to January 2021 and from February 2021 to April 2021. Again, the emphasis is on supporting viable businesses who are simply struggling due to the circumstances, rather than propping up those that are unsustainable.

  1. Extension to Coronavirus business loan schemes

Bounce Back Loan Scheme

The Bounce Back Loan Scheme was due to end on 4 November 2020 for new applications and this is being extended until 30 November 2020. It allows any business to apply for an immediate £50,000 cash payment with very favourable interest rates. As part of the emergency measures announced by Rishi Sunak, repayment terms have also been extended to 10 years from the original 6 years. This means that any businesses with an existing Covid-related business support loan will have almost twice as long to repay their debt. If a business is struggling longer term, they will also have the right to opt for interest-only payments or suspend their repayments entirely for up to six months. These loan term enhancements were unveiled as part of a Pay as you Grow initiative at the start of September.

So far, over one million small businesses have received a total of £38bn from the Treasury through this loan scheme and the Chancellor has promised none of them will see their credit ratings adversely affected. Read more about the Bounce Back Loans and how to get them here: Link to article which has been updated to reflect the new terms

 

Other loan schemes

The Coronavirus Business Interruption Loan Scheme, the Coronavirus Large Business Interruption Loan Scheme and the Future Fund are also being extended and these loans are also now repayable over 10 years.

A new loan support scheme is expected to succeed the Bounce Back Loan Schemes and is expected to launch from January 2021.

  1. Extension to VAT cut for hospitality and tourism

The VAT cut introduced for the hospitality and tourism sector is being extended until 31 March 2021, maintaining the new 5% rate. This was due to be finishing on 31 January 2021.

Additional VAT support

At the start of the lockdown, the government allowed all businesses to defer VAT payments until 31 March 2021. This has now been extended and rather than having to repay everything outstanding in one go, they will have the right to pay over 11 interest-free instalments. Whilst the VAT cut is for hospitality and tourism, this payment extension is for all VAT registered businesses.

If we can help with these or any other matters, please contact partners@rjp.co.uk.

How to get onboard with RJP
1
Talk to us
Have an initial discussion with a member of the RJP team to identify ways we can enhance your business's growth with our comprehensive support and strategic advice.
2
Hassle-free migration
Choose RJP and we'll smoothly manage all transitions, handling paperwork, coordinating with your current accountant, and ensuring no deadlines are missed for a worry-free experience.
3
A pathway to growth
Finally, we will send you the required documents to sign and return, leaving you to continue leading your business, backed by our abundant, responsive advice and support.
Here’s what our clients have to say
Hear directly from our clients about how RJP's personal, straightforward approach has made all the difference in their business and personal success.
"I just wanted to drop you a short note to say how grateful I am for the support that RJP has provided over the past 4 weeks while our Financial Controller was away. I struggle to comprehend how much work your staff get through during their weekly visits and they are always a pleasure to have around the office."
"I wanted to write and express our gratitude for your help and hard work in getting Probate through and settling all the taxes. I am so pleased that we selected RJP, as your professional help and updates throughout this process have been invaluable. If at any time in the future Probate assessment may be needed, you will be our first port of call. Once again, many thanks to the whole team."
"I would like to take this opportunity to thank you very much for the amazing job you have done navigating us through this whole process. My family and I also really appreciate the care and compassion demonstrated by you and your team in every dealing. Our thanks to everyone."
"Just a quick e-mail from me to thank you for achieving the target for producing the draft accounts – it is very much appreciated and gives a first class impression of your firm. Many thanks."
"RJP provide our company with a complete service which takes the stress and strain away from the day to day running of our accounts! Their understanding of our business and their patience and advice is invaluable."
cta background
Get the latest tax tips to your inbox every month


    faq background
    FAQs
    What services can RJP offer to help me understand how my business is truly performing?
    At RJP, we understand that keeping a finger on the pulse of your business's health is crucial. That's why we offer management reporting services—think of them as a regular health check for your company. These insights show you the real-time performance of your business, helping you make informed decisions to nurture and grow your enterprise.
    I'm keen to expand my business. How can RJP help me with that?
    We love seeing your business flourish! Growth and improvement are at the heart of our practical advice. From the ins and outs of everyday operations to big-picture strategic moves, we're here to offer clear, actionable steps that can propel your business forward.
    Audits and compliance can be a headache. How does RJP ease this process for business owners?
    We know dealing with the issue of compliance and auditing can be less than thrilling. That's exactly why we're here—to handle the complex stuff so you don't have to. We offer comprehensive compliance services, ensuring everything is up-to-date without you having to wade through a sea of regulations.
    I've heard about tax relief schemes but don’t know where to start - can RJP guide me?
    Absolutely! There's a world of opportunity out there to support your business financially, and we're well-equipped to be your guide. We can help you understand and access HMRC’s tax relief schemes that are relevant to you and your business, making sure you're not missing out on any potential benefits.
    If I have a question or need support, how responsive is RJP to my needs?
    When you need us, we're just a call or an email away—no question is too small or too large. We're known for our quick responses and our fixed fees mean you can reach out without worrying about unexpected costs. Plus, we always keep things simple and straight to the point. We're not just your accountants; we're part of your team, ready to support both your business and personal needs.