Autumn 2020 Business Support Guide
The Chancellor’s Winter Economic Plan
Rishi Sunak received widespread praise for his business support measures introduced following the onset of the coronavirus pandemic. Many businesses and individuals have benefited from a range of schemes, including furlough grants for staff unable to work, grants for the self-employed, deferral of VAT and Income Tax payments and cheap, government-backed business loans.
With the economy still some way from getting back to normal and many businesses still unable to operate normally, if at all, the Chancellor has had to balance the need for further support this winter with concerns about the enormous borrowing that the government is taking on. The result is that there will be a range of new measures this winter but, overall, they will be much less generous than those previously introduced.
The furlough scheme is being replaced from 1 November by the Job Support Scheme. This will entail an employee working at least one third of their normal hours, but also being paid for two-thirds of their hours not working. The government, however, will only fund a maximum of 22.2% of the worker’s normal earnings, compared to the 60% to 80% it has contributed under the furlough scheme. This leaves the employer bearing the cost of a lot more hours than the employee actually works, so the scheme may not be of much use for many businesses that are struggling to keep trading.
There are to be further grants for the self-employed. For those who qualified, the first two grants were based on 80% and 70% of previously reported profits, but the next grant will only be based on 20%. Details of the fourth grant have not yet been finalised.
Further VAT and Income Tax deferrals are going to be available next year, to help the cashflow of businesses and individuals.
Other plans announced include a bonus to employers for keeping on previously furloughed staff for 3 months after furloughing ends on 31 October and the Kickstart Scheme, which has the laudable aim of providing six months’ government-paid work experience for young people on universal credit.
In this newsletter we explain what has been announced so far on these new business support measures.
You can read the full version here.