The Chancellor has announced a set of measures to support businesses that have been adversely affected by the pandemic over the coming months.
Pay as you grow scheme
The new ‘pay as you grow’ scheme applies to businesses which took government guaranteed loans during the crisis. “Loans can now be extended from six to ten years nearly halving the average monthly repayment”, the Chancellor said. The Coronavirus Business Interruption Loans will also be extended for up to 10 years.
Businesses who deferred their VAT will no longer have to pay a lump sum at the end of March 2021. Organisations will have the option of splitting the sum into smaller, interest free payments over the course of 11 months.
Job Support Scheme
The Government will launch a new Job Support Scheme as the Furlough Scheme comes to an end in October. The scheme will mostly apply to small and medium organisations. Only large businesses that can prove they have been adversely affected by COVID-19 will be eligible.
The new scheme will start on 1 November and last six months. To be eligible, employees must work a minimum of 33% of their working hours. Employers will pay the hours worked and for the remaining hours not worked the Government and the employer need to pay a third each. In this way, employees working a third of their hours will receive at least 77% of their pay.
NFDA welcomes the VAT deferral and the pay as you grow scheme which will give dealers additional time and greater flexibility for their repayments in times when businesses face a number of external challenges.
Additionally, franchised dealerships have had to implement new working patterns to reduce costs, as a result, the Job Support Scheme could help dealers retain employees whose job is at risk.
It is important that we continue to monitor how the automotive sector performs in the last quarter of the year to consider any additional support the automotive industry may need going forward.