Chancellor Rishi Sunak has unveiled the Government’s winter economy plan gives an update on current coronavirus support measures for individuals and businesses. It has announced the launch of a new Job Support Scheme.
Key points of the winter economy plan include:
– The Coronavirus Job Retention Scheme (CJRS) will end as planned on 31 October 2020;
– A new Job Support Scheme will provide funding for employers who are able to retain employees but on shorter hours. The scheme will initially run for six months from November;
– The temporary reduced (5%) rate of VAT will be extended until 31 March 2021;
– Taxpayers will be given more flexibility overpayment of VAT and personal tax bills. Deferred VAT may be spread over 11 instalments, whilst self-assessment tax due on 31 January 2021 may be spread over 12 interest-free payments; and
– The repayment terms of bounce back loans and other coronavirus support loans are to be extended to help businesses with cash flow. In particular, a new Pay As You Grow scheme will allow businesses with bounce back loans to extend the term of the loan from six to 10 years.
With regard to the news that taxpayers can pay deferred VAT and self-assessment liabilities in instalments, it should be noted that unlike with the original deferments, instalment plans are not automatic and must be applied for. For VAT, the Government has confirmed that an ‘opt-in’ process will be in place by early 2021. For self-assessment, taxpayers can either use HMRC’s self-service time-to-pay facility or contact HMRC’s Time to Pay Self-Assessment helpline on 0300 200 3822.