The Winter Economy Plan: All you need to know as business owners

So, yesterday our chancellor delivered his Winter Economy Plan to the nation and whatever the colour of your politics, it was relatively good news for you as business owners.  

In this blog you will find the key headlines and how they impact your business:

Cash flow lifelines

Alongside many clients we have been working hard on cashflow forecasting and budgeting. Yesterday, saw a welcome announcement with further support by the government……this has thrown businesses a lifeline.

  • If you deferred your VAT which was due in March – June 2020, this was due for payment in March 2021 you can now choose to repay this in 11 equal instalments over the 2021/22 financial year.
  • The 2 loan schemes, CBILs and (popular) Bounce Back Loans now have the option to be paid back over a 10-year period. If you took out a Bounce Back Loan, this could reduce your monthly outgoing payment by almost a half.
  • Businesses who took out a Bounce Back Loan also – once they have made 6 payments – have the option of pressing pause on their payments for up to 6 months. This can only be taken once – talk to the Abbeygate team if you need any help or advice.
  • If you haven’t taken out a CBIL or Bounce Back Loan these schemes have now been extended and will close to new entrants on 30th November 2020, again Abbeygate can help and guide you all the way through the process.

Extension of the temporary reduced VAT rate for hospitality and tourism businesses

This will now remain at 5% until 31st March 2021.

Cash flow lifelines

Alongside many clients we have been working hard on cashflow forecasting and budgeting. Yesterday, saw a welcome announcement with further support by the government……this has thrown businesses a lifeline.

Help to retain jobs:

The Job Retention Scheme affectionately known as ‘the furlough scheme’ will still close at the end of October.

In its place on the 1st November comes The Job Support Scheme. This scheme will initially run for 6 months. It is very similar to long running schemes in Germany and France.

To qualify for the Job Support Scheme, your employee:

  • Must not be on a redundancy notice
  • Working at least 1/3rd of their normal working hours

And you as their employer must have a UK PAYE scheme in place, a UK bank account and is limited to SMEs or big businesses which can evidence they have been adversely impacted by COVID-19.

Here is how the scheme works… For every normal working hour, the employee doesn’t work, the government pays 1/3rd of their pay, and you the employer must also pay 1/3rd of their pay. The government contribution is capped at £697.92 per month. The employer will be reimbursed by the government in arrears. When we know how to apply to the scheme and submit your claims, we will be running a Facebook live event, with a live Q & A section.

Help for the self-employed

The self-employed grant scheme will be extended for another 6 months but limited to people already on the scheme. As the saying ‘every little helps’, but the pay outs have been vastly reduced for the extension. There will be 2 more grants. The 1st will be to cover November 2020 to end of Jan 2021 and will cover 20% of average monthly profits. Up to a max. of £1875. We are assuming this will be paid out in Feb 2021. The second grant will cover the period from Feb to the end of April. Amount to be paid up is still to be determined by the government.

And do not forget the Job Retention Bonus

This was not announced yesterday, but more detail on this scheme should be released soon. The outline details so far:

  • Employers will receive a one-off payment of £1,000 for every eligible employee that is claimed for.
  • The employee must have been furloughed by you and be back in your continuous employment from the most recent claim to the 31st January 2021
  • The employee must be paid an average of at least £520 between November 2020 and 31st January 2021
  • Have up to date payroll records – if you need help with this, please call Abbeygate
  • The payment is due to be paid in Feb/Mar 2021

Hopefully, there will be an update on this scheme ready for our Facebook live Q&A.

If you would like to read the full government documents, try them here:

If you need support with any of the above, our in house Growth Consultant, Tom Jamison is here to help. Just drop Tom a line on t.jamison@abbeygateaccountancy.co.uk and arrange a time to have a chat.

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