The Chancellor’s ‘Winter Economy Plan’

The Chancellor’s ‘Winter Economy Plan’

The Chancellor, Rishi Sunak, announced a new round of emergency economic measures on Thursday 24^th September, aimed at supporting businesses and protecting jobs during the second wave of COVID-19. The Winter Economy Plan includes a new Job Support Scheme, an extension of the income support scheme for the self-employed, and flexibilities for businesses on COVID-19-related loan repayments.

Job Support Scheme

The Job Support Scheme will replace the Job Retention – or furlough – scheme, which is set to end on 31^st October. Mr Sunak explained that the scheme will be aimed at protecting as many ‘viable’ jobs as possible. It will be launched on 1^st November and run for six months.

Under the new scheme, employers will continue to pay the wages of staff for the hours they work – but for the hours not worked, the government and the employer will each pay one third of their equivalent salary. Employees must be working at least 33% of their usual hours. The level of grant will be calculated based on employee’s usual salary, capped at £697.92 per month.

The Job Support Scheme will be available for all businesses across the UK even if they have not previously used the furlough scheme.

For more information: https://www.gov.uk/government/publications/job-support-scheme

Self-Employment Income Support Scheme Grant (SEISS)

The Chancellor also announced that the SEISS scheme, designed to compensate for lost income for the self-employed, will be extended for another six months. Those eligible will receive two lump-sum grants to cover three-month periods over the course of the extension. The instalments will be worth 20% of average monthly profits and will capped at £1,875 in total.

For more information: https://www.gov.uk/guidance/claim-a-grant-through-the-self-employment-income-support-scheme

Loan repayment flexibility

Businesses that took a Bounce Back Loan following the first wave of the virus, will be granted flexibility in their repayment through a new Pay as You Grow system. The length of the loan will be extended from six years to ten, and businesses will be granted access to six-month interest-only periods and payment holidays.

The Government will announce further details on Pay as You Grow in due course.