A cancelled Budget normally merits headline treatment. This year is different.
We said goodbye to autumn Budget 2020 with hardly a backwards glance. The Chancellor has since delivered not just an unheralded ‘Winter Economy Plan’ on 24 September 2020, but an update to that Plan, on 22 October 2020. The most recent update came as further parts of the UK were put under more stringent public health restrictions.
The Winter Economy Plan announced a successor scheme to the Coronavirus Job Retention Scheme, which ends on 31 October 2020. We provide more detail in our Covid-19 round up.
Further help for the self-employed comes via the Self-Employment Income Support Scheme (SEISS) Grant Extension (found here). The Extension is available to the self-employed and members of partnerships, and comprises two taxable grants. The emphasis is slightly different from the first SEISS grants, however. Although you don’t have to have claimed SEISS previously, you have to have been eligible to claim. You must declare that you intend to continue to trade, and are ‘currently actively trading’ but are impacted by reduced demand because of Covid-19. Alternatively, you must declare that you intend to continue trading, and were ‘previously’ trading, but are temporarily unable to do so because of Covid-19.
The Extension will be paid in two instalments. The first covers the three months from 1 November 2020 to 31 January 2021. It will be based on 40% of average monthly trading profits, paid in one single instalment, covering three months’ profits, and capped at £3,750. The second will cover the three months from 1 February 2021 to 30 April 2021. The level of this grant is yet to be announced.
Business grants: the government has announced additional funding primarily for businesses in the hospitality, accommodation and leisure sector in England. This will take the form of cash grants, administered by local authorities where businesses are adversely impacted by restrictions in high-alert areas. Other parts of the UK operate their own schemes.
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.