The Chancellor has also said that the Self Employed Income Support Scheme grant will be extended.
Mr Sunak told MPs: "Throughout this crisis we have sought parity between employees and the self employed, providing more than £13billion of support to 2.6million self-employed small businesses.
"So I am extending the self-employed grant on similar terms and conditions as the Jobs Support Scheme."
Pay as you Grow scheme
Sunak has also unveiled a "pay as you grow" scheme for businesses which took government-guaranteed loans during the pandemic.
He said: "Loans can now be extended from six to ten years nearly halving the average monthly repayment."
The Pay as you Grow loans will be introduced to give these firms more time to repay the loans, up to 10 years.
The government is also starting work on a new guarantee loan programme to begin in January.
All state-backed loan schemes will be extended until the end of November 2020.
VAT cut extended
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VAT will be kept at 5% for hospitality and tourism, instead of the planned increase to 20%.
Speaking in parliament, he said: ”The final step I'm taking today will support two of the most affected sectors, hospitality and tourism.
“On current plans, their VAT rates will increase from 5% back to the standard rate of 20% on January 13.
“So to support more than 150,000 businesses and help protect 2.4 million jobs through the winter, I'm announcing today that we are cancelling the planned increase and will keep the lower 5% VAT rate until March 31 next year.”