The Chancellor Rishi Sunak has today (24 September 2020) announced a new “pay as you grow” loan as part of a new package to support the UK’s “fragile” economy throughout the Winter.
“Bounce Back” loans have been granted to more than 1 million small businesses, equating to loans in excess of £38b.
The Chancellor today announced that he is granting business owners additional time to make the repayment of these loans, extending the repayment period to 10 years. It was reported that this would, on average, half the monthly repayments due.
Businesses can choose to take interest only loans and those that opt to adopt the “pay as you grow” model will not see their credit rating affected.
The Chancellor has also announced that he will allow businesses to spread their deferred VAT bills over 11 smaller separate payments, with no interest to pay. According to the Chancellor, nearly half a million businsses deferred over £30bn of VAT this year.
Furthermore, on VAT, the 15 per cent VAT cut for the hospitality and tourism sector will remain in place until 31 March 2021.
Rishi Sunak has also announced an extension for self-assessed income taxpayers on their outstanding tax bill which can extend over 12 months from next January.