24 September 2020 
Julia Ascott, Employment Taxes Specialist
You have probably already been bombarded with updates following the Chancellors statement to the house today. This article highlights what we actually know about the measures introduced and how it might impact HEIs.
The Job Retention Scheme will not be extended past the original end of October deadline. However, the Chancellor did confirm that the Job Retention Bonus Scheme will still go ahead as planned, whereby employers can claim £1,000 per eligible employee, BUFDG article here.
Yes, it’s another acronym. Instead of changes to JRS, the Chancellor introduced the Job Support Scheme (JSS) which is aimed at those businesses who are experiencing depressed demand for their services, but where the jobs in question remain viable (i.e. not being continued just as a result of JRS or JSS). Employers will pay for the hours worked by their employees, but if they have to reduce hours due to reduced demand, employee working hours can reduce to a minimum of 1/3rd of their normal hours and the Government will cover up to 2/3rds of their normal wages, up to a maximum of £697.92 per month.
JSS will begin on 1 November and run for 6 months but it is only available to small/medium businesses or large businesses whose turnover has significantly fallen. All employers will be available to join, where they meet the eligibility criteria even if they didn’t claim under JRS. If employers do claim under JSS, they can still claim for the JRS bonus if they are also eligible for that.
Whilst the JRS was a more wide reaching support programme, the JSS seems to be more targeted towards those smaller businesses that we see nightly on the news, worrying about rapidly reducing customer numbers and concern about having to shut their doors for the last time.
From first look, it doesn’t appear that JSS will be as useful for the HE sector as JRS was but we will hopefully gain more insight as more details are published.
The government guarantee on CBILS and CLIBS has been extended to a maximum of ten years. Previously, CBILS provided a guarantee for up to 6 years and CLBILS the maximum loan term was 3 years. Arrangements by the banks making these loans will vary and we await their announcements. If terms of loans are extended in line with the guarantee extension, this may make the schemes more attractive to HE borrowers.
The application deadline for the loan schemes has been extended to 30 November (although the Chancellor said “the end of the year”, which you would have been forgiven for thinking meant 31st December).
As the schemes were announced at different times, they previously had different closing dates, with each scheme originally open for applications for a period of six months – 30 September (CBILS and Future Fund), 20 October (CLBILS).
The Bank of England confirmed on Tuesday (22nd Sept) that the CCFF will close for new purchases of commercial paper from eligible issuers with effect from 23 March 2021. This means that the Facility will make no purchases of CP after 22 March 2021. The CCFF will also close to new applications from counterparties and issuers looking to become eligible on 31 December 2020.
VAT payments that have been deferred would, under current plans, fall due in March 2021. To help cashflow recovery, taxpayers are being allowed to spread their VAT bill over 11 smaller payments which are interest-free.
To reflect the major impact Covid19 has had on the hospitality/tourism sectors, The Chancellor has announced in his speech to Parliament earlier today that he is extending the VAT reduced rate for tourism and hospitality from 12 January 2021 to 31 March 2021. The BUFDG guide has been updated to reflect this change. Please find the revised version here.
VAT payments that were due between 20 March 2020 and 30 June 2020 could be deferred by taxpayers. They were payable by 31 March 2021. The Chancellor has announced today that he will allow businesses to spread that VAT bill over 11 smaller repayments, with no interest to pay. Further information on how this will work in practice will be provided to members, when available.
