Yesterday, the Chancellor Rishi Sunak, delivered a summer statement announcing further measures in Parliament to support us all during the pandemic and help our economy.
VAT Cuts + Eat Out To Help Out
It was announced that the rate of value added tax (VAT) is being cut, on hospitality and tourism from 20% to 5%, from 15th July 2020 to 12th January 2021. Post this, rates will resume at 20%. The cut applies to food and non-alcoholic drinks as well as accommodation and admission to attractions across the UK. This move was made in a bid to “get the sectors moving and to protect jobs”.
Many in the food and drink sector will consider this an opportunity to shore up the finances of their ailing businesses. This means they may, in effect, keep the extra money by not cutting their prices. We hope that there will be more guidance published stating if there are rules on how this will work. The chancellor also announced that there will be discounts of up to £10 per head (both adults and children) for anyone eating out at participating restaurants from Mondays to Wednesdays in the month of August. To participate in this scheme eligible businesses will need to register and can do so through a website to be opened next Monday.
Bonus Payment For Keeping Furloughed Employees
Today the Chancellor announced the introduction of the Job Retention Bonus.
This is a one-off payment of £1,000 to employers that have used the Coronavirus Job Retention Scheme (CJRS) for each furloughed employee who remains continuously employed until 31 January 2021. The bonus will provide additional support to retain employees.
To be eligible, employees will need to:
- earn at least £520 per month (above the Lower Earnings Limit) on average for November, December and January
- have been furloughed at any point and legitimately claimed for under the Coronavirus Job Retention Scheme
- have been continuously employed up until at least 31 January 2021.
Employers will be able to claim the bonus from February 2021 once accurate RTI data to 31 January has been received. More information about this scheme will be available by 31 July and full guidance will be published in the Autumn. If we have furloughed staff for you, and you think you will need assistance with this, get in contact with our payroll department.
Stamp Duty Cuts
In an attempt to encourage homeowners and prospective buyers to step into the housing market, the government is offering a temporary increase in threshold for Stamp Duty Land Tax in England and Northern Ireland. This means that no Stamp Duty is paid on the purchase of a main home from £125,000 to £500,000, with immediate effect until 31st March 2021. If you’re looking to buy a home, right now might be a great time. Please note, if you buy a second residential property in the same period you will still have to pay the 3% Stamp Duty Land Tax additional rate for property purchases up to £500,000.
Jobs
Mr Sunak announced various schemes to give incentives to employers, to encourage them to employ young workers, and to improve skills training.
In a bid to prevent mass unemployment as coronavirus hits the UK, the Chancellor announced a £2bn “kickstart scheme” to create more jobs for young people. A fund has been created that will subsidise six-month work placements for people on Universal Credit aged between 16 and 24, who are at risk of long-term unemployment. For each “kickstarter” job, the government will cover the cost of 25 hours’ work a week at the National Minimum Wage – £4.55 for under 18s, £6.45 for 18 to 20-year-olds, and £8.20 for 21 to 24-year-olds. Employers will be able to top up that payment if they wish.
The government is also pledging to provide 30,000 new traineeships to get young people in England into work, as fears about mounting unemployment increase. Under the £111m scheme, firms in England will be given £1,000 for each new work experience place they offer. Employers are not required to pay trainees for a work placement, unlike apprenticeships where the minimum wage rate is £4.15 per hour. We understand that some of you may have never hired an employee under these new terms. If you would like some more innformation and assistance with paper work, speak to our HR department today.
If you have any queries about these new government announcements, please contact us on 02085300720 or email enquiries@nordens.co.uk
