COVID Update 45

Chancellor Rishi Sunak has unveiled his new job support scheme in Parliament, in a bid to stave off a spike in job losses once the current furlough scheme ends.

Sunak’s new scheme, which will come into effect on November 1 when the furlough scheme ends on October 31, is aimed at encouraging businesses to retain what he called “viable” jobs.

If employees are kept on and work 33% of their original hours, the government will then subsidise another third of that employee’s salary, with the final third being paid for by the employer.

A graphic tweeted by HM Revenue and Customs said under the scheme, an employee working a third of their original hours would receive 77% of their full-time pay with businesses covering 55% of that.

Sunak said the job retention scheme was aimed predominantly at small and medium-sized businesses, saying that only large businesses “in real trouble” could apply.

The new scheme will run for six months, starting November 1, but Sunak warned parliament that he “couldn’t save every business, and every job,” adding “no chancellor could”.

He added that the government’s previous furlough scheme, which had covered up to 80% of full-time pay, had to be bought to an end “because the support must adapt and evolve”.

Sunak also confirmed he would be cutting interest on all businesses who had deferred VAT repayments until March next year. Rather than being forced to pay that back in a lump sum, businesses can split repayments over 11 smaller payments.

In terms of the government’s previous large and small coronavirus business interruption loans, Sunak announced a “pay as you grow” system, allowing repayments to be extended out to up to 10 years, halving monthly repayments.

The chancellor also unveiled specific schemes for two of the “worst-hit” sectors – hospitality and tourism. For those sectors, Sunak said he would cancel the planned increase of VAT from 5% to 20%, which was due to come into effect in January.

Instead, the lower rate of 5% will remain until March 31.

He made no mention of extending this to other sectors.

The chancellor was keen to get home the message that the UK economy now needed to learn to live with the virus and (I quote) “life is more than about merely existing”.

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To avoid your business being fined, please ensure that Customers wear a mask when entering your establishment, they can remove the mask when seated at their table. (Staff must also wear masks).

Also, just to clarify: The availability of the NHS app is mandatory at all hospitality and other close-contact venues.

The use of the app by members of the public is not mandatory, therefore venues will still need to have an alternative system in place to record track and trace details from members of the public attending their premises (for instance if people who do not have a smartphone or do not want to use the NHS COVID-19 app).

The Prime Minister made a statement on Tuesday to the House of Commons outlining further measures in England to tackle the spread of coronavirus. The PM's statement can be found here.

From tomorrow, Wednesday 23 September, office workers who are able to work from home should do so and the requirement for customers to wear face coverings will be extended to all users of taxis and private hire vehicles.

From Thursday 24 September measures including the following will be introduced:

• Pubs, bars and restaurants must operate table-service only, except for takeaways
• Hospitality venues must close at 10pm (which means closing, not last orders). The same will apply to takeaways, although deliveries can continue;
• The requirement to wear face coverings will be extended to include retail staff and staff and customers in indoor hospitality, except when seated at a table to eat or drink; and
• COVID-secure guidelines will become legal obligations in retail, leisure, tourism and other sectors.

Furthermore, from Monday 28 September a maximum of 15 people may attend weddings, while 30 may attend funerals. Business conferences, exhibitions and large sporting events will not be reopened from 1st October.

These new measures will be enforced by tighter penalties. Guidance on the additional measures will be made available on Gov.uk.