Winter Economic Plan

On the 9th of October, the Chancellor announced some modifications to the previously announced Winter Economic Plan, and to his jobs support scheme.

The Jobs Support Scheme as announced on September 24th will still begin when the Coronavirus Job retention scheme ends. However, for businesses that are forced to closed because of COVID-19 the scheme will be expanded.

We have also provided new information about cash grants that the government is making available for businesses forced to close, and information about what happens if you are told to self-isolate, for example by test and trace.

Find below information for an overview of these measures. Information is still being released and we will update our information for members as soon as it becomes available.

If you need advice on your individual situation, please contact our service centre.

The Jobs support scheme 

When?  

The jobs support scheme will replace the furlough scheme when it ends at the end of November and will last for 6 months.  

 

Who?  

The scheme now differentiates between those businesses that are legally obliged to close because of Coronavirus, and those that remain open. Obliged to close means that the government has forced the business or organisation to close legally. However, it does include businesses that are told to operate on a collection only or a delivery only basis.  

For those who are to be supported because their employer is obliged to close, employees must have been on their employer’s PAYE payroll on 23rd September 2020. The employer will only have to pay national insurance and pension contribution 

Where the business remains open, all small and medium sized businesses are eligible for the scheme, as well as large firms that have proved they have had a fall in turnover due to Covid.  

 It will be open to all eligible firms, not just those that have furloughed employees under the Coronavirus Job Retention Scheme (CJRS), and all employees of those firms. 

 

Why?  

For businesses that remain open the scheme is designed to encourage businesses to keep workers on, but on fewer hours rather than making redundancies.  

For those that are forced to close, meaning workers cannot work, the government will support those jobs. 

 

How does it work?  

If you work for an employer that is open, you must work at least a third of your hours, then for any of the hours you are not working you will get 2/3 of your pay for those hours.  

This means assuming you are working 33% of your hours, you will get 77% of your pay, (up to a cap).  

Your employer cannot claim for you under the scheme if you are made redundant or are on notice for redundancy.  

If your employer is legally forced to close, because of COVID restrictions, and you cannot work for one week or more, then you will be paid 2/3 of your salary, up to £2,100 a month. Businesses will only be able to claim whilst they are subject to restrictions, and workers must be off work for a minimum of 7 consecutive days. 

 

Who pays my wages under this scheme? 

If your employer is still open, they will pay for the first 1/3 of your wages, the part you are working. Then, your employer and the government will pay 1/3 each of the remaining amount of your wages. 

The government contribution will be capped at £697.92 per month. Your employer will have to pay your pension and national insurance costs.  

If your employer is forced to close by covid restrictions imposed by the government, then the government will pay for 2/3 your wages, up the £2,100 per month cap. Your employer will still only have to pay your pension and national insurance contributions.   

 

How much will I have to work to be eligible for the scheme? 

If your employer is obliged to close, then you won’t be able to work but will be eligible for 2/3 of your wages under the scheme.  

Otherwise, if you are on the Job Support Scheme you must work at least 33% of your usual hours. The government have said that after 3 months they will be considering whether to increase from 33% and raise the minimum threshold.  

 

Can I have periods on and off the jobs support scheme (my employer has not been forced to close)? 

Yes, but each period of short time working must be for at least 7 days. Beyond that you can cycle on and off the scheme. You don’t have to work the same pattern each month. 

 

Can my company claim the “job retention bonus” that was promised for firms that kept workers on until January after the CJRS closed, as well as this new Job support scheme? 

Yes, they can, as long as you are still working, they can claim the job retention bonus as well.  

 

I haven’t been furloughed under the Coronavirus Job retention scheme. Will I be eligible for the Jobs support scheme?  

Yes, firms that have not made use of the job retention scheme can use the jobs support scheme. Neither the employer nor the employee has to have previously used the Coronavirus Job retention scheme.  

 

I have just started a new job. Will I be eligible? 

You will need to have been on your employer’s PAYE payroll on or before September 23rd, 2020 to be eligible. 

 

How long does the Job Support scheme last? 

The job support scheme will last from November 2020 for 6 months, so will be due to end at the end of April 2021. There will be a review point in January.  

 

I work for a large business; will I be eligible for the scheme? 

You might be eligible for the initially announced jobs support scheme, if your employer has been adversely affected by COVID-19 and has had a fall in turnover of over a third. They will have to demonstrate to the government that they have been adversely affected. Your employer will be asked not to do things like pay dividends whilst in receipt of the scheme.  

If your employer is forced to close legally, then you will be eligible.  

 

Will this new scheme encourage employers not to make redundancies? 

We are pleased that the government has stepped into support firms who need to reduce hours and to retain jobs or cannot operateWorkers who are placed on the scheme will get a good deal.  

However, because of the structure of the scheme, it may make it more cost effective for some firms to operate with fewer workers working full time hours, rather than more workers on reduced hours.  

It would cost an employer 33% more to employ two people half time, than 1-person full time, assuming these workers earn the national minimum wage.  

If an employer is able to claim the job retention bonus, then this could change that, and cover the extra costs for the employer, in some circumstances.   

We hope that employers will use this scheme to retain as many jobs as possible and support hardworking families. We also hope that the additional support announced on October 9th for businesses who have been shut down by government rules will help to save jobs in those organisations.  

 

 Changes for the self employed 

The existing Self Employment Income Support Scheme (SEISS) will be extended until 30th April 2021. 

This scheme is open to those who are currently eligible for the SEISS, and are continuing to trade, but are facing reduced demand due to COVID 19.  

 

How will the next stage of the SEISS work?  

The next rounds of the SEISS will be paid out in two grants. 

 The first grant will cover the three months between the start of November until the end of January. It will cover 20% of average monthly trading profits. You will get one payment for that three-month period. The payment will be capped at £1,875.  

The second grant covers the three months between the start of February and the end of April. The government hasn’t yet confirmed how much this will be.  

 

What do I need to do to be eligible? 

You will need to be eligible for the SEISS although you do not have to have applied previously.  

You must also declare that: 

  • You are currently actively trading and intend to continue to trade 
  • You are impacted by reduced demand due to COVID-19 during the qualifying period. Qualifying period means the time between the first of November and the date you claim.  

 

What can I do if I am not eligible? 

Unfortunately, gaps in the provision for self-employed people remain, and we know there are many people who have fallen through the gaps. We continue to lobby the government to support the forgotten self-employed.  

We believe that the SEISS needs to go further to help more self-employed people.  

Is there other support that I can benefit from as a self-employed person?  

You might benefit from some of the following schemes which have new rules announced as part of the Winter Economy Plan.  

 

  • Temporary changes to the rules around self-assessment tax returns. 

In July 2020 many people deferred self-assessment tax payments to January 2021. Now, the government says that if you owe less than £30,000 in tax, then you will be able to use enhanced Time to Pay to spread these payments over an additional 12 months 

This means you will have the option to spread paying your tax bill from July 2020 out for a year between January 2021 and January 2022.  

  • Government Loans 

You may also be eligible for the government loans schemes, whose rules have changed slightly recently. See below for information about these loans, including the Bounce Back loans and Coronavirus Business Interruption Loans. 

  • VAT deferral 

Back in summer of 2020, many businesses agreed to defer their VAT payments to 2021. These bills were due to be paid in March 2021.  You will now be able to spread the payments out into 11 equal instalments between March 2021, and January 2022.  

  • VAT reduction for hospitality and tourism. If you are in one of these sectors, then you will continue to be charged a reduced rate of VAT of 5% until 31st March 2020.  

You might also be eligible for help through the befits system, such as Universal Credit, or Employment and Support Allowance.  

 

Government Loan Schemes

Bounce back loans

At a glance: What has changed? 

  • You can now apply for this loan until the 30th November 
  • You can now choose to repay your loan over 10 years instead of 6 
  • You will have the option to: 
    • Move temporarily to interest only repayments for up to six months 
    • After you have made at least six payments, you will be able to pause repayments entirely for up to six months

The government is calling these measures “pay as you grow”  

 

What is the Bounce Back loans scheme? 

Bounce Back loans are loans of between £2000 and £50,000 capped at 25% of turnover.  

If you get one of these loans you will not have to make any repayments for the first 12 months and the government will cover your first year’s interest payments.  

Note that you can only apply for one of the CBIL and the Bounce Back loan.  

 

Coronavirus Business Interruption Loans, Coronavirus Large Business Interruption Loans and the future fund.

 At a glance: What has changed? 

  • You can now apply for all of these loans until the 30th November 
  • The government has allowed lenders to extend the terms of a loan for up to 10 years 

 

What is Coronavirus Business Interruption Loans Scheme?  

The CBILS is a scheme for small to medium businesses that allows you to borrow up to £5million.  

The government offers an 80% guarantee to the lender which should give lenders the confidence to lend to SMEs. It is for UK based businesses with a turnover of under £45 million 

If you get one of these loans you will not have to make any repayments for the first 12 months and the government will cover your first year’s interest payments.  

You will need to show that you have a business that would have been viable if not for the pandemic and has been adversely affected by the pandemic. 

If you want to borrow £30,000 or more, you will need to show that your business wasn’t classed as a “business in difficulty” on the 31st December 2019.  

Most SMEs (small or medium enterprises) are eligible except for banks, insurers, reinsurers, public sector bodies, or state funded primary and secondary schools.  

You can apply for these loans from a participating lender- and can find out more here 

 

What is the difference between Bounce Back Loans and CBILs? 

You can only apply for one of the Bounce Back Loan and the CBILS.  

The differences include: 

  • The CBILs has a partial guarantee of 80% from the government whilst the Bounce Back loan is 100% guaranteed  
  • The maximum lending amount for the CBIL is £5million, whereas you can only borrow up to £50,000 under the Bounce Back loan 
  • The minimum BBL is £2000, whereas the minimum CBIL is £50,001
  • The interest rate on the BBL is 2.5% and there are no fees. The interest rate and fees on the CBIL are set by the lender 

With both types of loans, you cannot increase the amount that you borrow once you have applied.  

Both now have a repayment term of ten years.  

You can convert CBILS of less than £50,000 into a Bounce Back loan.  

 

What is the Coronavirus Large Business Interruption Loans Scheme (CLBILS)? 

This is a loan for businesses with turnover about £45 million. You can find out more about it here 

 

What is the coronavirus Future Fund? 

This is a fund for UK businesses that have matched funding from private investors. You can find out more about it here. 

 

Cash grants

On the 9th October the Government also announced, in England only, a cash grant that will never have to be repaid, for businesses forced to close. 

  • The smallest businesses, with a rateable value of £15,000 or less can claim £1300 per month.  
  • Medium businesses with a rateable value between £15,000-50,000 can claim £2000 a month.  
  • Larger business with a rateable value of £51,000 or more can claim £3000 per month.  
  • These will be paid in two fortnightly instalments.  

£1.3 billion funding has been granted to the Scottish, Welsh and Northern Ireland administrations, which may choose to implement a similar policy. 

 

Self-isolation Guidelines

If you are asked to self-isolate 

If you are asked to self-isolate, do not go into work. You may be asked to self-isolate if you test positive for Coronavirus, or if someone you live with has tested positive, if you’re instructed to self-isolate by NHS test and trace 

The law says that if you should self-isolate and you go to work, then you could be fined. This fine is a minimum of £1000 for a first offence. This increases if you do it again and can be up to £10,000.  

The fine could be more than this. The law describes another offence. It says that it is an offence if someone fails to self-isolate when they should without reasonable excuse, contacts others, and is “reckless as to the consequences of that close contact”.  

The fine for this starts at £4000 and is possible that someone going to work when they should be self-isolating may commit this offence.  

You might also get in trouble at work if you attend work when you should be self-isolating, and this could be treated as gross misconduct and you be likely to be dismissed. 

You should tell your employer that you are self-isolating at the start and the end of the isolation period. You should tell your employer that you are self-isolating as soon as possible, and before your next shift.  

If you don’t notify your employer that you are self-isolating, you could again be fined, from £1000. 

 

Grants to support those self-isolating 

You might be able to get a single payment of £500 from your local council if you’re employed or self-employed and you can’t work from home. 

To get the payment you must be self-isolating at home because the NHS told you to or you tested positive for coronavirus. 

You should be able to get the payment if you get at least one of these benefits: 

  • Universal Credit 
  • Pension Credit 
  • Working Tax Credits 
  • Income-related Employment and Support Allowance
  • Income-based Jobseeker’s Allowance
  • Income Support
  • Housing Benefit 

If you’re not getting any of the benefits, you could still get the payment if you’re struggling with your living costs because you can’t work. 

You can find out more and apply on your local council’s website – find your council’s website on GOV.UK.

 

If you are asked to self-isolate but your employer pressures you to attend 

We hope that all employers would respect the law and would encourage those who must self-isolate to stay at home. 

If you are asked to attend work when you should be self-isolating you should refuse 

If your employer knowingly lets a worker attend a workplace when they should be self-isolating, they can face a fine of up to £10,000. There is a minimum of a £1000 fine for a first offence.  

if your employer threatens you with a warning or dismissal because your refuse to attend because you are self-isolating, you are protected under the law. 

Your employer legally must not place you at detriment because you take steps to protect others from danger. Get in touch with us for advice if you are in this situation.