Surprise economic statement

Cancelling the autumn Budget, the government has outlined instead a ‘Winter Economy Plan’.

On 24 September 2020, the Chancellor announced additional measures to help deal with the ongoing economic strain of COVID-19. The focus was on supporting viable jobs, with the introduction of a successor scheme to the Coronavirus Job Retention Scheme, which ends on 31 October 2020. This new Job Support Scheme is covered in our COVID-19 round up.

Further help for the self-employed will be provided via the Self-Employment Income Support Scheme (SEISS) grant extension. The government states that this represents ‘broadly the same level of support for the self-employed as is being provided for employees through the Job Support Scheme.’

The extension comprises two taxable grants, and lasts from November 2020 to April 2021. It is available to the self-employed and members of partnerships. The emphasis is slightly different from the first SEISS grants, however. To qualify, you must be able to declare that you are currently actively trading and intend to continue doing so: and also that you are impacted by reduced demand because of COVID-19 in the qualifying period (between 1 November 2020 and the date of the claim). You must also fulfil the current eligibility criteria. You don’t, however, have to have claimed SEISS before in order to qualify.

Grants will be paid in two lump sums, each covering a three-month period. The first covers the period from the start of November 2020 to the end of January 2021, and is based on 20% of average monthly trading profits. It will be paid in one instalment and capped at £1,875. The second will cover the period from the start of February 2021 to the end of April 2021. Further details have yet to be announced, with the Plan stating that it ‘may be adjusted to respond to changing circumstances’. Available information can be found here.

VAT in the tourism and hospitality sector:

a temporary reduction in the rate of VAT for certain supplies of hospitality, hotel and holiday accommodation, along with admission to some attractions, took effect from 15 July 2020. This cut the VAT rate from the standard rate of 20% to 5%, and was due to expire on 12 January 2021. The Winter Economy Plan extends the 5% reduction to the end of March 2021.

We are on hand to discuss these, or any other areas of importance to you.

 

Back