Today (24th September 2020) Chancellor Rishi Sunak announced details of a new Job Support and Pay as You Grow schemes, designed to help businesses and employees while the new Covid-19 restrictions remain in place.
Below is a summary of the key details you need to know below:
New UK Job Support scheme
How does it all work?
- This scheme allows businesses to keep people in work on shorter hours, rather than making them redundant.
- The scheme will support “viable jobs” where employees must work a minimum of 33% of their normal hours and be paid for that work by their employer.
- The government and employer will agree to pay 2/3 of their wages lost by reducing working hours. So, employees working 33% of their hours will receive a minimum of 77% of their normal pay
When does it all start and how long will it run for?
The New Job Retention scheme will be starting on the 1st November and will run for a period of 6 months.
Who can claim?
Government will target SMEs and start-up firms where the support is needed most. Larger businesses will only be eligible if their turnover has fallen significantly.
It is open to all employers across the UK, even if you have not previously used the furlough scheme.
How do I make a claim?
Details on this are still to be revealed but we should expect details in the coming days.
Pay As You Grow scheme
What is this?
- This is an adjustment to the Bounce Back Loans that are available to businesses to support them during lockdown. This new scheme means that loans taken out can now be extended from six to ten years nearly halving the average monthly repayment.
- There is also now an option to move repayments to interest only, or even suspend payments if your business is still struggling for a period of up to six months.
- Coronavirus Business Interruption Loans will also be extended for up to 10 years, and a new loan scheme will also be announced in January, extending the current government loans offering.
Will my credit rating be affected with if I opt to take advantage of the pay as you grow scheme?
During his announcement Rishi Sunak stated that no credit rating will be affected.
How do I make a claim?
Details on this are still to be revealed but we should expect details in the coming days.
Modus will continue to keep you posted on key updates effecting your business throughout the course of the year. If, however you would like to talk to us about additional support options, please feel to get in touch on 01993 225030 or email hello@modus-accountants.co.uk.