Businesses across Bradford and beyond need to engage and plan for the future with the Government’s new financial support measures.
Faced with tougher restrictions, as announced by the Prime Minister Boris Johnson following news of a potential second wave of Coronavirus infections, businesses feared that they may not have the same level of financial support as previous months.
Calls have been mounting from MPs and various groups for the Government to act decisively, which is why the Chancellor, Rishi Sunak, has launched a new Winter Economy Plan.
Aimed at protecting those businesses that remain viable and the jobs they support, the new plan features a number of new measures, chief among which is the new Job Support Scheme.
This new scheme has been designed to help employers retain employees by allowing them to reduce their hours, while receiving funding for time that is not worked.
Mark Wilcock, Managing Director at Watson Buckle, explained that from 1 November 2020 the new scheme would ensure that for every hour not worked, the employer and the Government will each pay one-third of the employee’s usual pay, with the Government contribution capped £697.92 per month.
“The Government has estimated that employees using the scheme will, in many cases, still receive at least 77% of their usual pay,” said Mark.
“While the scheme is open to all small and medium-sized enterprises, only those larger businesses that can demonstrate that they have been adversely affected by COVID-19 can apply. The Government also expects that these large companies will not be making payments, such as dividends.
“Employers should, however, be aware that this scheme will not be available to those employees on a redundancy notice, but it can be used alongside the £1,000 Job Retention Bonus that has already been announced.”
Mark explained that while the new scheme wasn’t quite as generous as the furlough scheme, it would play an important role in helping businesses to retain workers at a reduced cost.
The Government has also announced that the Self-Employment Income Support Scheme would be extended, starting with a new grant that will cover the three months from November to the end of January, paying 20% of average monthly profits, capped at £1,875. An additional grant will then be available from January to March at a yet to be determined rate.
Mark said “Many businesses will also be pleased to see that the Government has extended applications for the existing Bounce Back Loan Scheme (BBLS) and the Coronavirus Businesses Interruption Loan Scheme until the end of November 2020.
“The Chancellor also announced a new Pay as you Grow measure for those businesses that have already used the BBLS, which will allow the repayment of this loan to be spread out over a longer period and offer payment holidays to those in distress.”
Mark explained that these measures, along with an extension to the VAT cut in hospitality and amendments to the existing VAT and tax deferral schemes, giving businesses and taxpayers longer to settle their tax bill, should assist struggling companies and their workers.