Posted by Mandy Casavant, Partner
Bye Autumn Budget, hello Winter Economy Plan
Following his announcement that there would not be an Autumn Budget for 2020 the Chancellor, Rishi Sunak, revealed the latest package of Government support. These measures are to support businesses during the restrictions imposed to limit the expected upswing in coronavirus cases.
The Winter Economy Plan seeks ‘… to strike the finely-judged balance between managing the virus and protecting the jobs and livelihoods of millions’. The focus is the wider economy rather than personal wealth which has, in past years, been under a Chancellor’s tax microscope.
These are the main points of the Winter Economy Plan:
- a new job support scheme;
- an extended self-employed income support scheme (SEISS);
- a continuation of the VAT reduction to help the hospitality and tourism sectors;
- new payment schemes for deferred VAT and self-assessment tax liabilities;
- an extension of the four Government-backed loans schemes; and
- changes to the repayment terms of bounce back loans and coronavirus business interruption loans.
We have had plenty of warning that Covid cases will increase over the winter months and with that warning the now familiar expectation of restrictions imposed by the Government. Nevertheless, the Chancellor seeks ‘to protect viable jobs in businesses which are facing lower demand over the winter months due to Covid-19, to help keep their employees attached to the workforce’.
It is going to be a long haul for our economy and for customer demand to recover. The Chancellor said: ‘Our economy is now likely to undergo a more permanent adjustment’ and he is trying to walk the increasingly narrow line between managing the virus and protecting jobs and livelihoods.
It is presumed that the Autumn Budget will be pushed back until March 2021. The Government measures to help our economy have been costly. How these costs will be recouped from our taxes is uncertain. What is clear is that our spending habits, working habits and lifestyles have changed dramatically and it is hard to see how the Chancellor may best cut his cloth.
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