At the fourth attempt, the Chancellor has unveiled an uprated package of measures to support businesses through the winter.
The Chancellor has announced:
- The furlough scheme will remain in place until 31 March 2021
- Employees will receive 80% of their usual salary for hours not worked
- Employers only have to pay the NICs and workplace pension
- The Job Support Scheme has been shelved
- The Job Retention Bonus payable in February 2021 is scrapped
- The self-employed will receive a third grant based on 80% of average trading profits
Separately, the Bank of England announced it was pumping another £150bn into the economy, and policymakers have kept interest rates on hold at a record low of 0.1%.
These measures are extraordinary, to deal with extraordinary times, and they provide more certainty and stability for businesses and individuals. However, we can expect to see tax rises in future to pay for all this, and a new report by the Office of Tax Simplification suggests aligning the rates of Capital Gains Tax with those of income tax.
The now delayed Job Support Scheme was not as generous as the furlough scheme, and its postponement until at least April next year will have been welcomed by many.
By then, we should have had a Spring Budget to reset the Treasury’s dashboard, and seen the roll out of a Covid vaccine to bring an injection of hope.
With the new ability to top up bounce back loans, many small businesses may choose to take advantage of the scheme to raise working capital for the winter, so it is vital that accredited lenders play their part to make sure the initiative is a success.
Government-backed loans are available until the end of January, and Bishop Fleming’s Corporate Finance team stands ready to help
We are here to support you with your business, so if you need help in maximising the opportunities, or if you are feeling cashflow or trading pressure, please get in touch, and also check out our Business after Covid-19 Transition Hub.
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