Wage subsidy will help renters, but more support is needed: Chancellor publishes Winter Economy Plan
A new job support scheme and an extension of the self-employment income support scheme are among the measures included in Rishi Sunak’s Winter Economy Plan, published today.
Major announcements included:
Job Support Scheme
With the current furlough scheme due to come to an end next month, the Chancellor has announced that a new job support scheme will start from 1st November, for six months. Under this scheme, the government will contribute towards the wages of employees who are working fewer than normal hours due to decreased demand. Employers will continue to pay the wages of staff for the hours they work - but for the hours not worked, the government and the employer will each pay one third of their equivalent salary.
In practice this means if an employee works a third of their hours, they will receive at least 77% of their pay. This support scheme will be available to small and medium enterprises, and those large businesses who have had a reduction in turnover.
Self-employment income support scheme extension
The Chancellor has also announced today that the self-employment income support scheme will be extended to 30th April 2021, to cover 20% of average monthly trading profits via a government grant.
Business Loan Schemes
For businesses, the application deadline for all loan schemes has been extended to 30th November. The repayment of Business Bounceback Loans has been extended from six to 10 years, and there is the option to make interest-only payments and suspend repayments altogether, for up to six months.
Self-assessed income taxpayers can extend their outstanding tax bill over 12 months, from January, and businessess who have deferred VAT will not need to pay a lump sum at the end of March 2020, but instead can choose to split payments over 11 months, interest-free.
Responding to the Chancellor’s Winter Economy Plan, Chris Norris, Policy Director for the NRLA, said:
“We welcome the Government’s measures to subsidise wages. We warned that the end of the furlough scheme ran the risk of many households facing further difficulties in paying their rents. Today’s announcement is an important first step to prevent this.
“That said our research still shows that private landlords across England have faced rental loses of up to £437 million as a result of COVID-19.
“It is vital that the Government now follows the example set in Wales and Scotland and develops interest free, government guaranteed hardship loans to help tenants pay off rent arrears built as a result of the pandemic. We cannot expect them, or landlords, the vast majority of whom are individuals without the means to absorb significant losses, to continue to struggle without support.”