What is the Winter Support Scheme?
On the back of the easing of the furlough scheme and with no end to the pandemic situation the government have had to improvise and come up with a scheme to support businesses through until 2021. The chancellor has recently announced the winter support scheme that aims to protect both jobs and businesses throughout what could be a tough winter. So, what is contained within the winter support scheme?
Firstly let’s look at that hospitality sector. If your business is in that sector you’re going to be supported by a reduction in VAT rates throughout the winter now that the eat out to help out scheme has come to an end. These reduced VAT rates also apply and extend to the tourism sector that has also been hit very heavily by the pandemic with the restriction of travel. This means that the VAT rate for both of these sectors will remain at 5% down from 20% until 13th January 2021 when this is expected to be revised.
The government has also announced a kickstart scheme that encourages businesses to take on new employees with the government paying the wages for that employee at the national minimum wage level for 25 hours per week. In return, the company gains an extra employee without having to pay their salary. Another scheme that has been announced that is going to start kicking in soon is the Jobs Retention Scheme which aims to reward employers for how many employees they can retain come March 2021 with the business being eligible for £1000 per employee retained.
There is also an extension throughout the winter for those that were on the self-employed income support scheme. Which was brought in to help support those who were self-employed who didn’t qualify to be supported by the furlough scheme which is expected to last throughout the winter and into 2021 when we can hope to see some normality. At the moment as part of the winter support scheme, it is expected to cover profits for the self-employed from November 2020 through until January 2021. We are also expected to see the introduction of a second grant from February 2021 through until April 2021.
Another scheme you need to know about is the Job Support Scheme. In which employees will have to work at least a third of their normal hours. In return, the business itself would cover a third of the wages and in return to encourage the business to do this, the government will then contribute a third of the wages so that in total the employee is earning 2/3rds of their normal wage. The intention behind this scheme is to keep employees in jobs until normality returns and they can return full time. If you’re on a zero-hours contract you can still qualify for this scheme however they are yet to provide more detail about the minimum amount of hours you would need to work.
The coronavirus loans scheme has also had its deadline extended for applications until the end of November in order for businesses to consider and get their applications in ahead of the festive period and the winter months. If you’re a business owner and you’ve not yet taken advantage of the coronavirus loan scheme now is the time to start considering it as you don’t have long to get your application in.
There is also another loan scheme being introduced by the government called ‘pay as you grow’ which is intended to provide more flexibility when it comes to businesses having to pay back their loans. The timeframe for these loans can also now be extended from 6 to 10 years allowing time for the global economy to return to normality so businesses can start repaying when they’re in a better position to do so.
These are just some of the points that are being covered in the winter support scheme. If you want to know more about the options that are open to your business why not get in touch with a member of the team here at D&K Accounting and we can advise you on how best to prepare your business for what could be a long and tough winter for many businesses ahead