What happens when the Job Retention Scheme ends?
Job Support Scheme
As part of a package of measures the chancellor said the new jobs support scheme was aimed at protecting ‘viable’ roles rather than all posts which have been kept going as a result of state support under the furlough programme.
Mr Sunak explained, “The scheme will support viable jobs so employees must be working at least a third of their normal hours and be paid for that work, as normal, by their employer.”
The Jobs Support Scheme will enable workers, who have been unable to work in their full time hours due to the coronavirus, to receive at least 77% of their normal wages for six months, on the basis that 'viable' jobs keep people in work for at least 1/3 of their normal hours.
Under the scheme:
- Employers will pay employees for their work
- The government and employers will each cover one-third of the lost salary for employees until they can work
- The grant will be capped at 697.92 per month
- All small and medium sized businesses will be eligible for this scheme
- It will be open to employers across the UK even if they have not previously used the Furlough scheme
- Employers can still claim the Job Retention Bonus for retaining staff on shorter hours.
For example if an employee works 33 per cent of their usual work pattern, the government and employer would pay an additional 22 per cent each of the employees usual wage.
The scheme will be in place from 1 November 2020 to April 2021.
Other points raised in the ‘winter economy plan’ by Rishi Sunak for businesses are:
Bounce back loans
Mr Sunak has announced a ''pay as you grow'' scheme to allow firms to repay bounce back loans over a period of up to 10 years.
It will mean loans can be extended from six to ten years, businesses who are struggling can now choose to make interest-only payments, and anyone in trouble can apply to suspend repayments altogether for up to six months.
Keeping VAT at 5%
VAT is to stay at 5% for hospitality and tourism until March 31 2021.
Mr Sunak said this was to support more than 150,000 businesses and protect 2.4 million jobs in hospital and tourism through the winter.