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MILLIONS of small businesses will get extra support from the government after Rishi Sunak announced he is extending the self-employed grant scheme.

The Chancellor confirmed the financial lifeline as part of his wider Winter Economy Plan to help prop up the economy.

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Chancellor Rishi Sunak in the House of Commons today
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Chancellor Rishi Sunak in the House of Commons todayCredit: BBC

The new self-employed grant will cover 20% of average monthly profits, up to a total of £1,875, spanning November to January next year.

An additional second grant will also be available for self-employed workers to cover February 2021 to the end of April.

The government hasn't said how much this second grant will cover.

Businesses will be eligible for the new help if they previously qualified for the self-employment income support scheme (SEISS) and if they're actively trading, even if they're facing reduced demand.

Today, the Chancellor announced:

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What help is out there for businesses and self-employed workers?

THE government has introduced the following measures to help self-employed workers and businesses during the coronavirus outbreak:

Income-tax deferrals: Self-assessment income tax payments, that were due in July, can be deferred to the end of January next year.

Rent support: Businesses who are struggling to pay their rents are protected from eviction until the end of June.

Coronavirus business interruption loan scheme: SMEs can get loans and overdrafts of up to £5million for up to six years and the government will guarantee up to 80 per of these.

Grants of up to £10,000: Small firms can get grants of up to £10,000 to help with ongoing business costs.

VAT payments: VAT payments can be deferred for three months.

Tax bill help: SMEs that cannot afford their tax bills can ask HMRC for a “time to pay” arrangement so any debt collection is suspended.

Business rates holiday: A 12-month business rates holiday has been introduced for many businesses.

Who can apply?

To apply for the scheme you must meet the following criteria:

  • Eligible for SEISS at the moment - although, you don't have to applied for previous grants
  • Still actively trading and intend to continue to trade
  • Experienced reduced demand due to Covid from November 1 until date of claim (for first grant)

The grant is subject to income tax and National Insurance Contributions.

How did the self-employed grant scheme work before?

For the previous grants, only those who made less than £50,000 a year in profit between the 2016 and 2018 tax years were eligible to claim the funds.

The first SEISS grant was worth 80% of three months' profits up to a cap of £7,500 in total, or £2,500 per month.

While the second grant covered up to 70% of profits over three months again, worth up to £6,750 in total.

SEISS has helped around 2.6million self-employed small businesses get back on their feet following the coronavirus pandemic.

The government hasn't said when applications will open for the new set of SEISS grants - but HMRC will provide updates on the  website.

Mr Sunak said: "The resurgence of the virus, and the measures we need to take in response, pose a threat to our fragile economic recover.

"Our approach to the next phase of support must be different to that which came before.

"The primary goal of our economic policy remains unchanged - to support people’s jobs - but the way we achieve that must evolve."

Unveiling his new package of support in the House of Commons today, the Chancellor also confirmed the new Jobs Support Scheme as a replacement of furlough.

The new measure will see the government top up the wages of people working at least a third of their normal hours.

Employees will be paid for that work as normal, with the state and employers then increasing those wages to cover two-thirds of the pay they have lost by working reduced hours.

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The Chancellor has also today given struggling businesses more time to pay back bounce back loans with a new Pay As You Grow initiative.

As part of the new measure, small businesses will be able to extend bounce back loan terms from six to 10 years, nearly halving the average monthly repayment.

Firms can also choose to make interest-only repayments, while firms in real trouble can apply to suspend repayments altogether for six months.

Businesses will have until the end of November to apply for the state-backed loans introduced during the first few months of lockdown.

The Chancellor also extended his VAT (value added tax) cut until March 31, meaning cheaper holidays and meals out for Brits.

VAT was slashed from 20% to 5% for the hospitality industry as part of Mr Sunak’s mini-Budget on July 8.

The tax cut was due to remain in place until January 12, 2021.

Mr Sunak and Prime Minister Boris Johnson had promised "creative" schemes to make sure businesses are still supported throughout the pandemic.

Mr Sunak said: "These are radical interventions in the UK labour market. These are policies never tried in this country before."

But The Chancellor acknowledged "we can't save every business" and "we can't save every job".

Dame Carolyn Fairbairn, CBI Director-General, said: “These bold steps from the Treasury will save hundreds of thousands of viable jobs this winter.

"It is right to target help on jobs with a future, but can only be part-time while demand remains flat. This is how skills and jobs can be preserved to enable a fast recovery."

Mike Cherry OBE, Federation of Small Businesses National Chair, said: "The UK’s small businesses are facing an incredibly difficult winter.

"Today’s support package is the flipside of the coin to Tuesday’s COVID-19 business restrictions.

"It is a swift and significant intervention, extending emergency SME loans, creating new wage support for small employers and the self-employed."

The latest bailout comes as confirmed new coronavirus cases soared above 6,000 yesterday— the highest daily number since May 1.

READ MORE SUN STORIES

There is already some targeted help for businesses in lockdown areas - who can claim grants to help keep them going.

Trade unions and organisations have been urging the government to rethink plans to end furlough to avoid a second wave of job cuts.

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