Changes to Furlough, SEISS and VAT in October 2021

1 year, 4 months ago by Oliver Atkinson

Coronavirus Job Retention Scheme (Furlough)

The government’s Coronavirus Job Retention Scheme will be ending on the 30th of September 2021. From the 1st of October 2021 Employers will no longer be able to claim furlough pay via the job retention scheme.

Previously employers could claim up to 60% of an employee’s wages up to £1,875.00 for hours not worked and top this up themselves to 80% as the scheme wound down.

Self-Employment Income Support Scheme

The SEISS will also be closing on the 30th of September 2021. For those that have not yet claimed the fifth grant you will not be able to do so after this date. See our previous article on how to claim the fifth grant before the deadline.

VAT reduced rate rise

There will also be an important change to the Government’s reduced rate of VAT for hospitality. From the 1st of October this will be increasing from 5% to 12.5%.

Businesses such as restaurants, takeaways and hotels and attractions such as zoos, cinemas and theatres have been able to use the reduced rate to increase their revenue in the wake of the Coronavirus pandemic.

This means that goods or services with a total value of £20.00 will incur £2.22 VAT where previously, at 5%, they would incur £0.95 and £3.33 at standard rate.

This will still allow restaurants, hotels and attractions to keep a greater proportion of their sales but will see the government begin to phase out the reduced rate before removing it altogether in April 2022 as it seeks to return to normality post Covid.

The reduced rate of VAT does not apply to alcohol.