Chancellor Rishi Sunak has announced new measures to support the economy following the implementation of further COVID-19 restrictions. The ‘Winter Economy Plan’ replaces the planned Autumn Budget, which has now been delayed until next year.
The plan shares the below key measures, the full plan can be found below also.
CBILS extension
- The Chancellor announced that the Coronavirus Business Interruption Loan Scheme (CBILS), Coronavirus Large Business Interruption Loan Scheme (CLBILS) and the Bounce Back Loan Scheme (BBLs) will all be extended and will now be open for applications until Monday 30th November. Loan offers can still be processed in a subsequent window until the end of this year.
- The Government guarantee on CBILS will be extended to up to ten years.
- A successor programme to the CBIL scheme is being drafted and is likely to be introduced in January 2021.
BBLS enhancements
- The Chancellor has also announced a ‘Pay as you Grow’ scheme where the term of these loans can be extended to ten years.
- Businesses will be able to make interest only payments on BBLS if they wish and will have the option to suspend payments for up to six months.
- The Chancellor confirmed the use of these options will not affect a borrower’s credit ratings.
Jobs Support Scheme
- The Chancellor also announced a new Jobs Support Scheme to replace the existing furlough scheme. The government will support the wages of staff who are forced to work reduced hours because of the pandemic. At least a third of normal hours must be worked and paid for as normal by employers. The Government will then cover up to two thirds of the pay lost.
- All SMEs will be eligible for the scheme, but larger businesses will only be eligible if their turnover has fallen.
- The scheme will be open to all businesses including furloughed workers. It is separate to the previously announced jobs retention bonus which can also be claimed.
- The self-employed support scheme will be extended on similar terms to the jobs support scheme.
Tax measures
- The Chancellor also announced that for businesses who opted to defer their VAT payment, this payment can now be spread interest-free over 11 smaller payments.
- Self-assessment taxpayers who opted to defer may also spread the deferred payment.
- The 5% VAT rate for hospitality and tourism businesses will remain in place until March 21st 2021.
Insolvency measures
- Changes to the Corporate Insolvency and Governance Act which were due to expire on 30th September will now be extended.
- Companies and other qualifying bodies with obligations to hold AGMs will continue to have the flexibility to hold these meetings virtually until 30th December 2020.
- Statutory demands and winding-up petitions will continue to be restricted until 31st December 2020.
The full statement can be found online here and you can read the plan in full below.