The Winter Economic Update: Key Points
This morning the Chancellor has announced his Winter Economic Update in place of the Autumn Budget. This article will outline the key points in the government’s economic strategy over the winter months.
- The economy has seen three months of growth however the resurgence of virus poses a threat and the key task is to move to the next recovery stage over winter.
- The underlying rationale is different, but the primary goal is still to support jobs.
- For at least the next six months the restrictions will be in place. The current Furlough Scheme will still end at the end of the 31st October as planned.
- The following article will outline the new policies and schemes announced today.
Jobs Support Scheme
The Job Support Scheme will directly support the wages of people in work, giving businesses who face depressed winter demand the option of keeping employees in a job on shorter hours rather than making them redundant.
- The scheme will support viable jobs so employees must be working for a third of their normal hours, and be paid for that work, as normal, by their employer
- The government, together with employers, will increase those people’s wages covering 2/3 of the pay they have lost by reducing their working hours. The employee will keep their job. Anyone who as of yesterday is employed is eligible
- Running November to April, all small & medium sized businesses are eligible to apply. But larger businesses only when their turnover has fallen. Businesses are eligible even if they have previously not used the furlough scheme
- Employers retaining furloughed staff on shorter hours can claim both the Jobs Support Scheme and the Jobs Retention Bonus.
Self-Employed Grant & Tax Bill Extension
To support self-employed traders through the winter the Chancellor is extending the existing self-employed grant on similar terms and conditions as the new Jobs Support Scheme. As well as this…
Self-assessed income taxpayers who need extra help, can also now extend their outstanding tax bill over 12 months from January.
Bounceback loans – Pay As You Grow
Loans can be extended from 6 to 10 years
Businesses can choose to make interest only payments
Businesses in trouble can suspend repayments for up to six months
There will be no impact on credit scores
Business interruption Loans
There will be an extended guarantee on loans up to 10 years
The deadline for all loan schemes will be extended to the end of this year
VAT Deferral Scheme
Businesses that deferred VAT payments that were due in a lumps sum in March 2021 now have the option to spread the VAT bill over 11 repayments, with no interest to pay.
Hospitality & Tourism Industries – VAT Cut Extended
The VAT rate increase planned for January 2021 will be cancelled until March 31st next year. The rate will remain at 5% until then.
Please get in touch with your Swindells' partner if you have any questions or would like advice regarding this update.
As more details emerge, we will be updating you as normal.
Selling Property: Capital Gains Tax & Private Residence Relief
When selling UK property, you will be liable to pay Capital Gains Tax (CGT) if you make a gain. Your gain is usually the difference between what you paid for your property and the amount you received when you sold it, though some additional costs may also be deductible.
Trading losses for sole traders & companies: Using them effectively
The economy has been hard hit by covid for over a year; with many businesses completely shut for much of 2020. Unincorporated businesses and companies may have even made a loss for the first time. Both can offset losses against profits – make sure that this is accounted for in the optimum way.
Tax relief for green businesses
Given the results of climate change, it makes sense to do all we can to reduce our emissions. Going green is also starting to make financial sense for businesses. There are several tax breaks available to companies that are looking to make offices more sustainable places to work.
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