The Winter Economy Plan update

The Winter Economy Plan update

The chancellor has announced the winter economy plan, which provides some additional support to individuals and the self-employed:

SEISS Grant Extension

There are to be two further payments under the Self-Employed Income Support Scheme.

These payments are to cover the period from November 2020 to April 2021.

Payments are to be made in two lump-sum amounts, each one to cover a period of three months.

To qualify for the third grant the business must be suffering from reduced demand due to coronavirus. The emphasis is on turnover not on profits.

The first grant, to cover the period from the start of November to the end of January will be based on 80% of the average monthly profits, and is capped at £7,500.

The terms of the second grant, covering the period from the start of February until the end of April, may vary from this and will be set in due course.

Bounce Back Loan payment extension

There will be the option to extend the repayment period for any BBLs to ten years from the original six years under a ‘Pay as you Grow’ scheme.

Interest only periods of up to six months (available a maximum of three times) and a one-off payment holiday (for up to six months, and only available after you have made at least six monthly repayments) will also be available under the scheme.

While increasing the term of any loan will reduce the monthly payments, you should be mindful of the total amount of interest that will be charged over the whole term.

Time to pay extension for self-assessment tax liabilities

Originally the 31st July 2020 payments could be deferred to 31st January 2021.

However, there will now be an option to pay both the deferred July 2020 amount and also any other payments due in January 2021 over twelve months until 31st January 2022.

Tax liabilities of up to £30,000 can be paid through the extended time to pay arrangements and there will be an online facility to arrange these. (For those unable to use the online facility, they can continue to use the helpline as before.)

Interest will be chargeable on tax paid by instalments after 31st January 2021 (the original deferment from 31st July 2020 to 31st January 2021 was interest-free.)

There are also a few requirements that people have to meet before they can use the scheme – that you have no outstanding tax returns, no other tax debts or other HMRC payments set up and that it is no more than 60 days since the tax was due for payment when you apply.

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