The Chancellor Rishi Sunak has announced his plan to support jobs and the economy. We have followed the announcement live and have summarised our current understanding of the new measures that will be introduced to help businesses maintain people in jobs when their position is and remains viable (which was the key word in the announcement).
The Furlough Scheme will end as planned on 31 October 2020 and will be succeeded by a new Job Support Scheme with the following key points:
- Support for viable jobs, which means that employees must work at least one third of their normal hours and receive pay from their employers for that work.
- The Government and the employer will pay two thirds of the remaining two thirds of the employees’ salary but further clarification on this point is likely to be required for more clarity. The image above provides an example.
- All small and medium employers across the UK, even if they have not previously used the Furlough Scheme, will be able to use the new Job Support Scheme. However large organisations will have to show a reduction in their turnover.
The Chancellor has also announced that they will continue their pledge to offer parity to self-employed people, so the self-employed grant will be extended in the same terms of the new Job Support Scheme.
Other support to businesses will include:
- Extending the bounce back loan from 6 to 10 years, with possibility of making interest only payment or apply for a 6-month repayment holiday without any impact on credit record.
- The Coronavirus Business Interruption Loan will remain available until December 2020.
- The deferral to tax bill will also be extended.
We will provide further information as soon as there is further guidance published.