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shopworker on the Job Support scheme that replaces furlough

Rishi Sunak’s Winter Economy Plan for coronavirus – what you need to know

If you’re wondering how your household finances are going to be affected by the end of the furlough scheme in October or what support is available if you are self-employed, extra help has been announced in the government’s Winter Economy Plan. 

Here we explain some of the key help available to support you and your family. 

New Job Support Scheme to replace furlough 

The current Job Retention Scheme (furlough) will end on 31 October 2020 and be replaced by the Job Support Scheme. 

Whether or not you are currently furloughed, you don’t have to do anything. Your employer will tell you if they are taking part in the Job Support Scheme.  

To be eligible your job must be viable – this means there needs to be work available for you to do.

If you’re eligible and your employer has signed up to the scheme, from 1 November you can be asked to work a minimum of 33% of your hours, which will be paid for as usual by your employer.  

If you’re on a higher salary, you might receive less as the government's contribution is capped at £697.92 per month. 

How might the new Job Support Scheme work for me? 

Take this example to illustrate this how this might look: 

John works a 40-hour week and earns the national living wage of £8.72 per hour. 

His employer has joined the Job Support Scheme and asks him to work 33% of his normal hours. That’s equivalent to 13 hours.  

His employer will pay him as usual for all of those 13 hours. He’ll earn £113.36 per week. 

John’s employer will also pay him for 9 hours (equivalent to 33% of his remaining hours, ie, 27 hours). That’s £78.48 per week.  

The government will also pay John for 9 hours (equivalent to 33% of his remaining hours, ie 27 hours). That’s £78.48 per week. 

This means John will receive a total of £270.32 per week. 

John will probably earn less money than he earned while on furlough. 

Help available if you’re self employed 

The government also announced extensions to a number of schemes designed to help those who are self-employed. 

Self Employed Income Support Scheme (SEISS) extended 

A new grant will be available for self-employed people to cover the period from November 2020 to January 2021.  

If you’re eligible, the government will pay 20% of your average monthly profits, up to a maximum total of £1,875. 

A second grant will run from February to April 2021 although the percentages may differ. 

To be eligible you must: 

  • earn more than half your income from self-employment  
  • have submitted a tax return for 2018/19  
  • have an average trading profit of less than £50,000 for the tax years 2016/17, 2017/18 and 2018/19, or if you haven’t been trading for all those years a trading profit of less than £50,000 for 2018/19. 

Details of when you’ll be able to apply for the grant will be released soon. 

Self-assessment tax deferral 

Ordinarily the tax bill for your self-assessment tax return for 2019/20 would be due to be paid by 31 January 2021. However, HMRC has extended this deadline by 12 months to January 2022. 

VAT payment deferral 

Any business that has deferred its VAT payment to March 2021 because of coronavirus can now spread that over 11 smaller interest-free payments during the financial year 2021/22 instead of paying it as a lump sum in March 2021. 

Bounce Back loans 

Small businesses who took out a Bounce Back loan to help with cashflow will see their repayment plan replaced by the new Pay to Grow scheme.  

It means that loan lengths will be increased from six years to ten, cutting monthly repayment amounts by nearly half. 

Interest-free periods of up to six months will be available as well as payment holidays. 

See our guides for more on the help available to you if you're self-employed.

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