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The Chancellor of the Exchequer has today announced a new scheme to replace the current Job Retention (furlough) scheme.

The new scheme, that becomes effective on 1st November, will see staff working and paid by their employer for one third of their normal hours.

Of the remaining time, the government will pay one third and the employer will pay one third.

An employee working 33% of their normal hours would receive 77% of their normal pay, with the government paying 22% and the employer 55% of normal pay.

Employers using this scheme will be entitled to claim the jobs retention bonus at the end of January.

Self employed workers will be able to access support on the same basis.

More details will be available in due course.

The Chancellor also announced that companies will have longer to repay loans from the government support schemes, with extensions of up to 6 years in a new “pay as you grow” scheme.   The government’s guarantee for the Coronavirus business interruptions loans can now be increased to up to 10 years.

Companies are also being given longer to pay their VAT bills. Bills previously deferred until march can now be repaid, interest free, over 11 months. The previous reduction of VAT in the hospitality sector to 5% has been extended until 31st March 2021.

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