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Chancellor Rishi Sunak has announced a new package of financial measures aimed at providing additional support to small businesses. 

In summary, these measures comprise:

Job Support Scheme
A new grant that’s designed to, ‘protect viable jobs in businesses who are facing lower demand over the winter months due to Covid-19, to help keep their employees attached to the workforce.’ 

Under the scheme, the business will continue to pay the employee for time worked, but the cost of hours not worked will be split between the employer, the government (through wage support) and the employee (through a wage reduction). The scheme will open on 1 November 2020 and run for 6 months. It’s worthy of note that businesses can claim through this new scheme and the Job Retention Bonus.

Further information can be found here.

Self-Employment Income Support Scheme (SEISS) – extension
This now well-established scheme will continue in its current form, providing support to the eligible self-employed who are trading but are facing reduced demand due to coronavirus.

The extension will provide two grants and will last for six months from November 2020 to April 2021. Grants will be paid in two lump sum instalments, each covering a three-month period. The first grant will cover 3 months’ profits from the start of November 2020 until the end of January 2021. It will be worth 20% of average monthly profits and will capped at £1,875 in total.

Further information can be found here.

VAT reduction for the tourism and hospitality sectors – extension
The reduced rate of 5% for those hard-hit businesses in the hospitality, holiday accommodation and attractions sectors has been extended until the end of March 2021. 

Tax deferrals – payment option
For businesses that deferred their VAT payments earlier this year, rather than pay a lump sum in March 2021, 11 monthly interest-free payments can be made. There is a separate extension for those who pay through self-assessment, via the Time to Pay scheme.

Bounce Back Loans – extension 
For businesses that took advantage of the Bounce Back Loan scheme, there is now the option of paying back the loan over ten years rather than six years.

Coronavirus Business Interruption Loan Scheme - extension
Lenders involved in the Coronavirus Business Interruption Loan Scheme will be able to extend the duration of loans from a maximum of six years to ten years.

About the Author

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Martin Johnson

Partner
With expertise in advising family-owned companies on a range of tax, accountancy and business issues, Martin also has an in-depth knowledge of the automotive and property sectors. In addition, he provides advice on inheritance tax planning and wealth management to owner-managed businesses.  Martin leads the firm in developing its expertise in the buy-to-let sector, advising both residential and commercial property owners on relevant tax and legislation issues.   A further element to Martin’s role is to build Torgersens’ relationships with banks, financial advisors and specialists in commercial and employment law to ensure that the firm’s clients have access to market-leading guidance.  

To get in touch please e-mail martin.johnson@torgersens.com.

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