VAT rate cut will be extended to March 31
THE UK Government’s Job Retention Scheme is to be replaced by a new Jobs Support Scheme from November, chancellor Rishi Sunak has announced.
Sunak said in parliament today (September 24) that, from November, the UK Government will offer to “support” the wages of people working fewer hours by continuing to pay a share of their wages for the next six months.
In order to qualify, an employee will have to work at least a third of their normal hours and be paid for that work as normal. For the hours they do not work, the employer and government will then pay a third each of the employee’s salary.
Sunak said the scheme is designed to “support viable jobs”.
“As I’ve said throughout the crisis, I cannot save every business,” said Sunak.
“I cannot save every job. No chancellor could. But what we can and must do is deal with the real problems businesses and employees are facing now.
“In March the problem was we ordered businesses to close. In response we paid people to stay at home and not work. Today the problem is different. Many businesses are operating safely and viably but they now face uncertainty and reduced demand over the winter months.
“What those businesses need is support to bring people back to work and protect as many viable jobs as we can.”
In addition to the Jobs Support Scheme, Sunak announced that the current 5% VAT rate on food and accommodation for tourism and hospitality businesses will be extended to March 31 and businesses given the option of paying their VAT bills in smaller instalments.
A new ‘Pay as You Grow’ system will also allow businesses which took loans through Westminster’s ‘Bounce Back’ scheme to extend their loans from six to ten years and make interest-only payments for up to six months.
The deadlines for the government’s various loan schemes – including the Bounce Back and Business Interruption loans – will be extended until the end of this year.
Responding to the announcement Marc Crothall of the Scottish Tourism Alliance said the measures “fall some way short of what is urgently needed to rescue Scotland’s tourism industry from a perilous situation”.
More reaction to follow.