Chancellor Announces Winter Economy Plan

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January 23rd 2022
Tax Week 42
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Chancellor Announces Winter Economy Plan

New Job Support Scheme, SEISS Extension for self employed, extended loan terms and more.

The Chancellor Rishi Sunak today announced new measures to help tackle economic issues arising from the extension to pandemic restrictions.

Below is a quick summary of announcements which are estimated to cost £300 million each month going forward:

  • Job Support Scheme

    Starting from November 1st, the Job Support Scheme will replace the previous Furlough scheme.

    Eligible employees will have to work a minimum of a third of their regular hours.

    For the hours not worked the government and employer each pay 1/3 of the missing wage.

    The government support will be based on the employee's normal salary and capped to a maximum grant of £672.92 per month.

  • Self-Employment Income Support Scheme (SEISS) extended

    The scheme is extended from November 1st 2020 through to April 30th 2021. However, it will now cover only 20 percent of average monthly trading profits based on the previous three years (or fewer) tax returns.

    The new lower percentage will be capped at £675 per month.

    First grants will be paid in January 2021 covering three months and capped at £1,875.

    The next three months (from February 2021) could be adjusted to a lower amount depending on the pandemic circumstances.

  • Loan scheme terms extended for Business Interruption Loan and Bounce Back Loan

    Application deadlines have been extended to November 30th.

    Pay as you grow terms now mean loans can be extended from six to ten years, with options to make interest-only payments as well as suspend payments for up to six months.

  • VAT cut for hospitality and tourism extended

    The cut to VAT from 20% to 5% will remain in force until end of March 2021.

  • Self-Assessed Tax Bill Extension

    Those who deferred their July tax bill can now extended their bill payment over twelve months from January 2021.

  • VAT bill deferral extension

    Businesses that deferred their VAT bill will be able to spread the payment over eleven months from March 2021.

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