The Chancellor announced measures to help businesses through into 2021 with the “Winter Economy Plan.” These are 2 of the 5 measures he has put in place. Our further blog details the other areas.
Job Support Scheme
The current furlough scheme ends on 31st October and a new 6-month Job Support Scheme will begin on 1st November.
The new scheme applies to any employees on your payroll on 23 September 2020 and is, therefore, not restricted to employees that had been on furlough between March and October.
To qualify employees must work for at least a third of their usual hours with the employer paying for all the hours. It is assumed this will be at the employees’ usual hourly rate but it has not been confirmed. Of the remaining “resting” hours, the Government and the employer will each pay a third at the employee’s usual wage rate. The employer therefore pays 55% of the employee’s wages for a third of their normal working time.
The Government’s contribution is capped at 22% of usual wages and £697.22 per month. The employer will need to pay the employer’s NI and pension contributions on all the employee’s pay. There are no restrictions for SMEs using the new scheme.
Tax deferrals
The deferral of the payment on account (POA), was one of the first to be announced, and tax due on 31 July 2020 is now due on 31 January 2021. No interest will be charged for late paid tax.
Individual taxpayers can have longer to pay all the taxes due by 31 January 2021. These are made up of second POA 2019/20, balancing payments 2019/20, capital gains tax 2019/20 (if not paid under 30 day rule), first POA 2020/21.
The taxpayer will need to apply for time to pay to spread the tax due over 12 monthly instalments to January 2022. If the total tax due does not exceed £30,000 the time to pay will be automatically agreed when completing the on-line form.
Where tax exceeds £30,000 or you need longer to pay, you will need to telephone HMRC to organise a bespoke payment plan.
Source: Accounting Web
Photo by Arlington Research on Unsplash
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