Rishi Sunak’s Winter Economy Plan: Key points

September 24, 2020

Chancellor Rishi Sunak has unveiled his Winter Economy Plan to help businesses and their employees as Covid-19 continues to have a devastating impact.

The key points are: 

  • A Jobs Support Scheme for employees will replace the furlough scheme, which effectively paid people not to work. Under this new scheme, businesses will pay employees for working at least a third of their normal hours. The government and employers will then top-up their pay packet to cover the time they are not working.
  • The Treasury says this means workers will get 77% of their usual pay.
  • The scheme, which will run for six months from November, will be open to all small and medium-sized businesses. Larger companies can only take part if their turnover has fallen. Employers do not need to have used the furlough scheme.
  • The existing grant for the self-employed is being extended in similar way.
  • Businesses will be able to extend their bounce back loans from six to 10 years through a ‘pay-as-you-grow’ scheme, so reducing their payments.
  • They can also switch to interest-only payments or suspend them for six months if they are ‘in real trouble.
  • The government guarantee on Coronavirus Business Interruption Loans will be extended to 10 years.
  • The temporary VAT cut from 20% to 5% for some sectors such as hospitality and tourism will remain in place until the end of next March.

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