The new Job Support Scheme will replace furlough, starting on 1 November 2020 and lasting six months. To qualify, employees must work at least a third of their normal hours, for which they’ll be paid in full by their employer. For ‘normal hours’ that are not worked, there will be three ways that the cost will be split.
- the state pays a third
- the employer pays a third
- the employee loses a third
Businesses are now given longer to repay bounce back loans. New and existing loans can now be repaid over 10 years, with payment holidays and interest-only repayment periods also available.
How will the new Job Support Scheme work?
Here’s what you need to know:
- The Job Support Scheme will start on 1 November 2020. It will run for six months. The Government will publish more guidance in due course.
- To qualify for the scheme, you must work at least a third of your normal hours. This will be paid in full by your employer.
- For the hours employees can’t work, the cost will be split three ways – and the contribution from the government is capped at just under £700 per month.
It has been confirmed that the employer will still have to cover their national insurance or pension contributions if they are being paid through the scheme.
- The scheme is open to many however not all employers can take part. All small and medium-sized businesses are eligible and larger businesses can take part but must prove they’ve been adversely affected by coronavirus and are unable pay dividends while using the scheme.
- Employers can take part regardless of whether they used the furlough scheme however employees cannot be on a redundancy notice while taking part.
- To be eligible, you must have been on your employer’s PAYE payroll on or before 23 September 2020. That’s the key cut-off date.
- You can go on and off the scheme. The Government says employees will be able to cycle on and off the scheme and do not have to be working the same pattern each month, but each short-term working arrangement must cover a minimum period of seven days.
Businesses given longer to repay bounce back loans
It has been announced that a new ‘Pay As You Grow’ Scheme will allow those who’ve borrowed bounce back loans to have more flexibility in how they repay, while the time you have to apply for a new bounce back loan has also been extended.
- You now have ten years to repay the bounce back loans instead of six.
- You can now take payment holidays and interest-only repayment periods on bounce back loans.
- The deadline has now been extended from the 4th November 2020 to the 30th November 2020.
Other measures to help businesses – including VAT deferral
- Other temporary loan schemes aimed at helping businesses will also be extended. Businesses will now have until 30 November 2020 to apply for the Coronavirus Business Interruption Loan Scheme, the Coronavirus Large Business Interruption Loan Scheme and the Future Fund.
- Business can delay VAT payments under the ‘New Payment Scheme’. Instead of paying in full by March 2021, businesses will now be able to spread payments throughout the 2021/22 financial year.