Withdrawal of COVID business support initiatives from the end of Septembercreative77
Three COVID business support initiatives will finish or change at the end of September, these are:
- The Coronavirus Job Retention Scheme (Furlough)
- The reduction in VAT rate on tourism and hospitality
- The Coronavirus Statutory Sick Pay Rebate Scheme
Firstly, the Coronavirus Job Retention Scheme will be ending on 30 September 2021. Claims for September must be submitted by 14 October 2021 and any amendments must be made by 28 October 2021.
From March 2020 to the end of September 2021, the cost of furlough has been estimated to have cost £66bn, according to figures from the Office for Budget Responsibility.
The government has said they believe that 11.6 million jobs have been supported since the Job Retention Scheme began.
Secondly the temporary 5% VAT rate that was applied to supplies in the tourism and hospitality sector at the start of the pandemic will come to an end on 30 September 2021.
From the 1 October the rate will increase to 12.5% until 31 March 2022 and it will then revert to the standard 20%.
For those businesses operating in this sector this will mean an amendment to their accounting software and possibly prices, although the 20% rate continues to apply to the sales of alcohol.
This means that some businesses will have to deal with four rates of VAT in their accounting systems from 1 October 2021 which has not happened since 1979 and will hopefully not happen again after 31 March 2022 when the temporary 12.5% rate for most sales made by the hospitality industry will end and the 20% rate will resume on 1 April 2022. We will then be back to three VAT rates: 0%, 5% and 20%.
And finally, the Coronavirus Statutory Sick Pay (SSP) rebate scheme will also close on 30 September 2021.
On 3 March 2020, the government scheme was introduced to enable small to medium sized businesses to recoup statutory sick pay costs due to Covid-19.
Covid-19 related SSP was payable from the first qualifying day rather than after three waiting days and this factor of ‘Coronavirus SSP’ is being retained. Employees will continue to remain entitled to SSP from day one of the period of incapacity for work (PIW) but only if the absence is for a coronavirus-related reasons.
From the 30th September under the new regulations, employers will not be able to reclaim SSP and any claims relating to periods prior to that date must be made by 31 December 2021.