Chancellor’s ‘Winter Economy Plan’ aims to prevent massive job losses
Rishi Sunak has scrapped his November budget because in his own words “now is not the right time to outline long term plans” and “what people want to see is focused on the here and now”. Instead he has today announced details of his ‘Winter Economy Plan’.
In his statement today, 24 September 2020, the Chancellor announced a support package to save jobs and help prevent the economy worsening.
Wage subsidies for part-time workers
The Furlough scheme will not be extended past 31 October 2020. It will instead, be replaced by the Jobs Support Scheme, modelled on one in Germany, in which taxpayers subsidise the wages of workers returning to work part time after being furloughed. The Chancellor said that employees will have to work for at least a third of their normal hours to quality for the new scheme, which begins on 1 November 2020.
VAT cut extension for hospitality and tourism
As widely predicted, the VAT cut for the hard hit hospitality and tourism sectors has now been extended to 31 March 2021 and the rate will remain at the reduced rate of 5% until that date.
Pay as you grow
The repayment terms on Coronavirus loan schemes for hard-hit businesses have increased from 6 to 10 years to reduce monthly repayments.
Commenting on the Chancellor’s speech Danny Houghton, Business Development Partner at MHA Moore and Smalley said “Today’s announcements will be welcome news to employers and workers alike, however, there was no mention of when the delayed Budget might occur, so we are yet to find out about longer term spending and borrowing plans. This delay will give business a little extra time to plan ahead of any future tax reforms.”
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