Published on: 24 September 2020Today, Chancellor of the Exchequer Rishi Sunak made a statement setting out further economic measures to support businesses and workers impacted by COVID-19.
VAT reduction extended for tourism and hospitality businesses
British Marine is pleased to see the VAT reduction for the tourism and hospitality sectors is being extended. This means that, as a result of the changes announced, the level of VAT will stay at 5% for eligible businesses until the end of March 2021. The VAT rate for the hospitality and tourism sectors was due to revert back to 20% slightly earlier - in January 2021.
New Job Support Scheme
He announced a new Job Support Scheme to support businesses facing falling demand as a result of the pandemic. Under this scheme, businesses in every part of the UK must pay employees their wages for the time they spend working. The rules will say that employees must work at least one third of their usual hours. The support scheme will then see the Government and employer pay a further third of the hours not worked.
The jobs must be considered viable and all SME’s will be eligible to use the scheme. Bigger businesses will only be eligible if they can evidence that the pandemic has had a significant impact and led to reduced turnover. Our members should note that this scheme will be in place for six months – starting on 1st November.
Self-Employed Income Support
British Marine understands that the Self-Employed Income Support Scheme is being extended and will cover 20% of average monthly trading profits. This will be provided in the form of a Government grant.
Delays to VAT and loan repayments
The final measures announced by the Chancellor include more time to pay back COVID-19 loans, including Bounce Back Loans and Coronavirus Business Interruption Loans. Businesses will also be able to pay the VAT they deferred and, instead, make a series of interest free payments and extend their outstanding bill over 11 smaller payments. Previously, businesses were expected to pay any VAT they had deferred in a lump sum at the end of March 2021.
British Marine would advise its members to familiarise themselves with the new support measures and to visit our microsite for more information. We will produce further updates as soon as we are able to. Details of the full winter plan announced by the Chancellor can be found here.