Updated: 19th January 2021
With the Coronavirus Job Retention Scheme (CJRS), which saw millions of people being placed on furlough during the spring and summer, due to initially end at the end of October, the pressure was on the Chancellor to unveil a replacement scheme when he gave his winter economic plan, materialising as the Job Support Scheme. On 5 November 2020, the Chancellor announced that the Job Support Scheme will no longer come into play and the Coronavirus Job Retention Scheme will be extended until the end of April 2021.
While stating many people have been brought back into work after being placed on furlough, he acknowledged that measures were still needed to protect those in vulnerable, but viable, jobs going forwards.
Additionally, Sunak also announced Pay As You Grow. As part of this, Bounce Back Loans can be extended for up to 10 years from the current six, a move which will almost halve the average monthly repayment figure. Furthermore, interest-only payments can be made for companies which are struggling, with those most in financial distress, able to take a six-month repayment holiday to help them get back on their feet.
The planned VAT increase for retail and hospitality has been cancelled, meaning businesses in these key industries will continue to pay VAT at 5%, now extended until January 2021. All of the government’s state-backed loan schemes will be extended until the end of the year, giving more companies the opportunity to apply. Furthermore, businesses will now be able to pay their VAT over 11 months in an effort to boost immediate cash flow.
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