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New Job Support Scheme announced by the Chancellor

Thursday 24 September 2020

In a speech in the House of Commons today, 24 September, Rt Hon Rishi Sunak MP, outlined the UK Government’s next stage of the economic plan to protect jobs over the winter period with the announcement of a new Job Support Scheme.

Sunak stated the underlying rationale must be different from what came before, but the primary goal remains unchanged to support people’s jobs but not prop up failing businesses. Millions of people have returned to work and are off the furlough scheme however, with a resurgence of Coronavirus cases, further measures are in place for the next six months, these are needed to prevent a further threat to the economic recovery.

Adapt and evolve

To provide job security, the Chancellor’s message is one of support, to protect as many jobs as possible with the new scheme starting in November and running for six months. It will take over from the Job Retention Scheme and will be open to everyone, even if they haven’t used the furlough scheme.

The new scheme will focus on small to medium-sized businesses with larger firms only eligible where they can provide evidence that they have been adversely affected by COVID-19. It will involve directly supporting the wages of people in work, allowing businesses to put people on shorter hours rather than making them redundant. Employees must work at least a third of normal hours and the Government will pay a third of the wages.

The self-employed will also see an extension of grants, like those provided in the Job Retention Scheme.

Assisting cashflow

The Government will also help businesses with cash flow problems offering tax referrals and loans and four further steps have been introduced: 

  1. Bounce back loans – more payback time and flexibility to pay loans have been given. It will be extended from six to ten years and interest-only payments can be paid too. For businesses in particular need, payments can be suspended for up to six months and business credit ratings will not be affected.
  2. Coronavirus Business Interruption Loans will be guaranteed for up to ten years and businesses will have more time to pay, with the extension of the scheme until the end of 2020. A successor loan scheme will be introduced in January 2021.
  3. Businesses who deferred their VAT payment will no longer have to pay a lump sum in March 2021. They will be able to split it into smaller, interest-free payments over the course of 11 months.
  4. VAT in the hospitality and tourism sector will remain at five per cent until 31 March 2020..

Quote mark

Life should no longer be put on hold; it means more than simply existing. We have all endured the crisis and live with the uncertainty of the moment, learning new limits as we go. However, the responsibility for defeating Coronavirus cannot be carried by the Government alone.”

Rt Hon Rishi Sunak MP, Chancellor of the Exchequer