Last week the Treasury announced that the autumn budget would be scrapped as a resurgence of Covid-19 cases raised the UK’s alert warning from level three to 4. Instead, the Chancellor delivered an emergency Winter Economy plan that “focuses on the here and now.” In response to growing pressure to extend the furlough scheme, Sunak confirmed that further measures were now needed.
The Chancellor announced details of a new “jobs support scheme” to replace the furlough scheme which ends at the end of October. With more than two million workers still on furlough, the Bank of England predicts the unemployment rate will hit 7.5% at the end of the year - more than double its current rate. Under the wage subsidy scheme, businesses will have the option of keeping employees in a job on shorter hours, rather than making them redundant.
The Chancellor said the scheme will begin in November and last six months. In order that jobs remain “viable”, workers must work a third of their usual hours and be paid for these by their employer as usual. For the time they are not working, the government will pay a third of their usual pay, and the employer will pay a third of their usual pay. The scheme will be aimed at businesses that need it most. All small and medium-sized firms will be eligible, but it will only apply to large companies where turnover has fallen by a third.
The Chancellor also announced an extension to all the government’s state-backed loan schemes in order to make repayment terms more manageable. He said that he was cancelling a planned increase in VAT and keeping a lower rate of VAT for hospitality and leisure firms until 31 March 2021.
Umbrella Exchange have access to a wide range of hassle-free services that can help you with setting up a limited company or finding the right umbrella company for you. To talk to a member of our team, call: 0203 393 3881