The government has unveiled emergency measures to replace the existing furlough scheme, including topped-up wages for employees working for at least a third of their hours.
The government has also extended the 15% VAT cut for the tourism and hospitality sectors to the end of March 2021.
For six months from 1 November, the government will top up the wages of employees working for at least 33% of their working hours.
Under the Job Support Scheme, those employees will be paid two-thirds of the remaining time that they do not work. Half of this will be paid by the employer, while the other half will be covered by the government.
This means that employees will receive at least 77% of their pay. The government’s contribution is capped at £697.92 per month.
All small to medium-sized businesses will be eligible for the scheme. It will only apply to larger businesses where their turnover has fallen as a direct outcome of the crisis.
Employers retaining furloughed staff on shorter hours can claim both the Job Support Scheme and the jobs retention bonus.
Chancellor Rishi Sunak said: “The furlough was the right policy at the time we introduced [it]. It provided immediate, short-term protection for millions of jobs… but as the economy reopens, it is fundamentally wrong to hold people in jobs that only exist inside the furlough. We need to create new opportunities… that means supporting people to be in viable jobs that provide genuine security.”
He added: “I cannot save every business. I cannot save every job… What we must do is deal with the real problems businesses and employees are facing now.”
Loan schemes will also be extended. The application deadline for all coronavirus loan schemes has been revised to 30 November.
Businesses borrowing under the bounce back loan scheme will be offered more time and flexibility for repayments.
Lenders will also give borrowers more time to repay amounts owed under the coronavirus business interruption scheme.
The self-employment income support scheme will be extended until 30 April. This covers 20% of average monthly trading profits via a government grant, for viable traders.
Businesses will also be able to defer VAT payments, with the option of splitting their bills into smaller, interest-free payments over the course of 11 months.
To send feedback, e-mail pui-guan.man@egi.co.uk or tweet @PuiGuanM or @estatesgazette
