THE Chancellor’s Winter Economic Plan has been largely welcomed as the Covid-19 pandemic continues to affect business.
Rishi Sunak announced:
- A new Jobs Support Scheme will be launched for employees working at least a third of their normal hours, who are being paid for that as normal. The government and employers will jointly increase their wages to cover two-thirds of their lost pay and the employee will keep their job
- All small and medium-sized businesses are eligible, but larger businesses must show their turnover has fallen during the crisis. Employers can use it even if they have not previous used the furlough scheme it replaces
- It will run for six months from November
- The existing grant for self-employed people is being extended on similar terms to the Jobs Support Scheme
- A “pay as you grow” scheme was announced for businesses, allowing them to extend their bounce back loans from six to 10 years, reducing their payments
- Businesses can also move to interest-only payments or suspend repayments for six months if they are “in real trouble”. Credit ratings will be unaffected
- The government guarantee on Coronavirus Business Interruption Loans will be extended to 10 years and a new successor loan guarantee programme will be announced in January
- The temporary reduction of VAT from 20% to 5% for some sectors will remain in place until 31 March 2021
Stephen Haddrill, Director General of the Finance and Leasing Association, said: “It’s good to see that the Chancellor has accepted our recommendation to extend CBILS (Corona virus Business Interruption Scheme), and we look forward to seeing what the successor scheme for 2021 will look like. We have already proposed a revised version of the Enterprise Finance Guarantee Scheme.
“What hasn’t been addressed, and what continues to be a challenge for our independent lenders, is access to funding that can then be deployed under the guarantee schemes. Our members are ready and willing to support SMEs, but they can’t do that without funds.”
Sue Robinson, National Franchise Dealer Association Chief Executive, said, “We welcome the VAT deferral and the pay as you grow scheme which will give dealers additional time and greater flexibility for their repayments in times when businesses face a number of external challenges.
“Franchised dealerships have had to implement new working patterns to reduce costs, as a result, the Job Support Scheme could help dealers retain employees whose job is at risk.
“It is important that we continue to monitor how the automotive sector performs in the last quarter of the year to consider any additional support the automotive industry may need going forward.”
