The Winter Economy Plan
Updated: Oct 5, 2020
Is this the help we need?
Everyone’s aware of the detrimental impact of Covid-19 and the impact it has had on the economy. With the furlough scheme coming to an end on the 1st of October, new measures have been put in place to prevent the mass unemployment that is looming ever closer... During the last 6 months, the government have paid the wages of nearly 12 million people, highlighting the urgent need for more financial support once the furlough scheme ends.
Last week, the Chancellor announced new measures to replace the existing partial furlough policy, to try and protect workers and employers, as the economy hits some of its toughest months to date. The government stated that it would keep its support under constant review to protect jobs and the economy, resulting in the new Winter Economy Plan. The package includes a new Jobs Support Scheme to protect millions of returning workers, extending the Self Employment Income Support Scheme, VAT cuts and the Job Retention Bonus. Lets
take a look at them in a bit more detail…
The Job Support Scheme
The job support scheme will be introduced from 1st November to protect jobs in businesses who may struggle with the lower demand in the winter months. With so many new and ever-changing schemes, we’ve outlined the main points for you to know as an employer and employee:
The scheme is set to run for 6 months
Employees must be working at least 33% of their usual hours
Employers will continue to pay the wages of staff for the hours they work
The hours not worked, the government and employer will each pay one third of their equivalent salary
Businesses can take advantage of the scheme, even if they haven’t previously used the furlough scheme.
This scheme means that employees who can only go back to work on a shorter time, will still be paid two thirds of the hours for those hours they can’t work, due to decrease in demand. It is hoped by introducing this scheme, many people’s job’s will be saved. Although people may not be getting full pay, they will be avoiding redundancy which can be detrimental to their wellbeing in the long run. If you are concerned about your position in your company or the help you can get as a business owner, more information can be found on the government website here .
The Job Retention Bonus
The Job Retention Bonus is a scheme designed to encourage businesses to keep hold of their workers. There is a payment of £1,000 for employers that bring furloughed workers back, until the end of January, which will dramatically help with the rate of unemployment. This scheme was designed to sit alongside the Job Support scheme, and it has been said that businesses should utilise both schemes in order for them to protect jobs and their businesses. However even though it does help for the time being, it can be argued that it merely moves the jobs-cliff edge from now to January.
Self Employment Income Support Scheme Grant (SEISS)
The government is extending the SEISS, in hope to support millions of self-employed individuals. An initial taxable grant will be provided to those who are currently eligible for SEISS and who are actively continuing to trade but face reduced demands. Lets take a look at a few main points if you find yourself in this bracket:
The initial lump sum will cover three months worth of profits
The three months will be for the period from November to the end of January 2021
The sum will be worth 20% of average monthly profits, up to a total of £1,875
There may be a second grant available to cover the period from February – April 2021, depending on the ever-changing circumstances.
It’s encouraging to see the government are covering all basis and not neglecting the self employed as it was previously seen at the beginning of the outbreak. If you find yourself in this situation and unsure on what help you can get, more information can be found here.
Will this help?
The introduction of the Winter Economy Plan will reduce the coming rise in unemployment, but it will far from halt it… With the dramatic change in working hours and working demand, it is inevitable that businesses are going to be hit hard and unemployment is going to sky rocket once the schemes eventually subside. However, that being said, without the government’s help and the implementation of these schemes, the economy would be in a worse place and almost unsalvageable. It is hoped that those that need it take all the help they can get to power through the next few months.
If you want to know more about how you can utilise these schemes and save your business precious money – get in touch with us.