Here’s what you need to know about getting your business through the rest of 2020
It feels like circumstances surrounding COVID-19 are changing almost daily, so it’s no surprise that many entrepreneurs are finding themselves both confused and concerned.
To help you make sense of things, we’ve cut the fat on the Government’s Winter Economy Plan and highlighted six points you should know.
Here’s how the new plans could impact you and your organisation.
New Job Support Scheme
Lasting six months from 1st November, this scheme is designed to protect viable jobs in businesses if you’re facing lower demand. It will only be available to employees who are working reduced hours due to less demand as a result of COVID-19.
As an employer, you will continue to pay staff for the hours they’ve worked. For the hours they haven’t worked, you and the Government will contribute two third of their equivalent salary. There is a cap of £697.92 per month per employee for this grant. All the information can be found here.
VAT Deferral instalments
It was originally announced that those deferring their VAT payment would have to pay it back in a lump sum at the end of March 2021. However, this is no longer the case. You now have the option of splitting it into smaller interest-free payments over an 11-month period. This may give you a bit breathing room when it comes to your business finances.
Tourism and Hospitality VAT extended
For all businesses within the tourism and hospitality sector, the 5% VAT rate has been extended until the end of March 2021. This is designed to offer further help to the likes of hotels, restaurants and more which have been particularly hard hit by the pandemic, and which are facing fresh hardships with restrictions on opening hours.
Government loan schemes
There has also been an extension placed on available loan schemes. Applications for the Coronavirus Business Interruption Loan Scheme, or CBILS, have been extended — as have applications for the Coronavirus Large Business Interruption Loan Scheme (CLBILS), Future Fund Scheme and Bounce Back Loans. All of these schemes have been extended to the 30th November to ensure that more businesses can benefit from this Government-backed support.
What’s more, CBILS lenders will also be able to extend the terms of the loans from a maximum of six years up to 10 years if it will help you to recover from the impact of the pandemic.
“Pay as you Grow”
Many business owners have been able to access the Bounce Back Loan Scheme in recent months, and these people will now be offered the choice of more time and greater flexibility when it comes to repayments.
Like CBIL loans, these loans can now be extended from six to 10 years, effectively halving the average monthly repayment. There are also options in place for those struggling to make repayments. You can choose to make interest-only payments, or even suspend repayments altogether for up to six months.
This new system as has been christened the Pay as you Grow repayment method, and it will not impact your credit rating.
Self-Employment Income Support Scheme
The Self-Employment Income Support Scheme has been extended until 30th April 2021 in order to support viable traders who are facing reduced demand over the winter months as a result of the pandemic. This will cover 20% of your average monthly trading profits through a Government grant up to a total of £1,875.