Chancellor Rishi Sunak has announced his ‘new winter economy plan’ to support businesses and jobs as restrictions to our movements across England come into play in the fight against Covid19 – probably for six months.
The Chancellor has already confirmed that the usual November Budget is cancelled and he has outlined support which will kick in from November 1 – the day after the existing furloughing scheme ends.
The key phrase seems to be that support is now targeted at businesses which can offer ‘viable jobs’. This seems to mean companies that can employ people actively working at least a third of their normal hours.
Opposition MPs are questioning why there is no mention of those excluded from support or those who have only been able to access very small business grants e.g. the self employed who are directors of limited companies, those who have just started in business in the last year and others.
For many business owners who are paid through dividends, no income has been received from their businesses and, in spite of the furlough scheme, some have had to take out CBILs or bounce back loans just to keep going.
Here are some highlights from Rishi Sunak’s speech:
*A new Jobs Support Scheme will be introduced from November 1 for six months – where ‘viable jobs’ will be supported with government top ups to wages. An employer must be able to employ staff for a third of their normal hours and the government will then help an employer to top up that salary to two thirds of normal pay.
*This will be open to any medium or small business even if they have not previously used the furloughing scheme.
*The self-employed support scheme will continue.
*Bounce Back Loans can be paid back over ten years and will be pegged to the principle of ‘pay as you grow’.
*Business Interruption Loans will extend pay back terms to ten years and business owners can apply for a loan up to December 31 this year.
*Deferred VAT bills which were due to be settled in March can now be repaid over a longer period (11 months).
*VAT for the hospitality and tourism sectors will remain at 5 per cent until March 31 2021.
The Chancellor once again made it clear that the Government can not save every business or every job.
Julianne Ponan is the CEO of Creative Nature, a company offering snack products and superfoods which are free from the top 14 allergens. The company was named UK Small Business of the Year by the FSB two years ago.