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Winter Economy Plan 2020

02-Oct-2020

Winter Economy Plan 2020

The government have set up a new range of support measures for those who have businesses which are being adversely affected by COVID–19.  These include:

• An extension of the VAT reduction from 20% to 5% for those in the hospitality and tourism sector, which will now run until 31 March 2021  (see our facebook post on 22 July 2020 for more detail).

• A “Time to Pay” payment plan for those unable to pay their self assessment bill by 31 January 2021 (including deferred payments on account). You can set up a Time to Pay payment plan online to spread your payment over a period up to 12 months.  This should receive automatic approval, so long as your debts are below £30,000.

• The new “Job Support Scheme” to replace the existing “Coronavirus Job Retention Scheme”, which will start from 1 November and run for 6 months. The scheme is to support businesses who only need staff to work reduced hours, so long as the employee works a minimum of one third of their normal hours.  The employer pays full pay for the actual hours worked and the employee then receives an amount equivalent to two thirds of the normal pay for the unworked hours, funded equally by the employer and the government. For example:

Janet usually works 36 hours a week at £10 per hour, so would normally expect to receive £360 gross pay. Under the scheme, her employer could ask her to only work 12 hours, for which she would receive her normal pay on these hours of £120. She would then receive two thirds of her normal pay for the hours not worked (£240 x 2/3rds = £160). The employer would fund £80 for unworked hours and the government would pay the remaining £80.

The employer would remain responsible for the deduction and payment of employee tax, national insurance and pension contributions, along with the appropriate employer contributions.  The Government contribution is subject to a cap of £697.92 per month.

For further assistance on any of the above please contact either our VAT department, Tax department or Payroll department as appropriate, or if you are not already a client please telephone 01983 523361 and book a free initial appointment with one of our directors.

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