Job Retention Bonus Scheme – With the flexible furlough scheme set to finish at the end of October (see previous blog here), Rishi Sunak announced a job retention ‘bonus’ scheme to replace it. The scheme will pay £1,000 to employers for each of their furloughed employees who remains in employment from November to the end of January 2021 and meet the minimum earnings of £520 on average per month. The employee must have been furloughed previously under the scheme.
Claims can be submitted in February after the January RTI submission. Full guidance has not yet been released.
Job support for apprentices and young workers – A new Kickstart Scheme will create government-subsidised jobs for unemployed young people on Universal Credit and aged between 16-24. The government will cover an amount equivalent to the National Minimum Wage for each young employee for up to 25 hours a week with firms able to top up the worker’s pay.
Employers can apply for the scheme from August 2020, and jobs are expected to be created from this Autumn. Businesses will also be offered a £1,000 per trainee payment. The grant will be capped at 10 jobs per firm.
And if that wasn’t enough there will also be an Apprentice Bonus where the government will pay employers £2,000 for each new apprentice, they hire under the age of 25, and £1,500 for each apprentice they hire aged 25 and over, from 1st August 2020 to 31st January 2021.
VAT Rate Cut to 5% for the hospItality sector – from Wednesday 15th July VAT will be cut from 20% to 5% on food and non-alcoholic drinks from restaurants, cafes and pubs, both eat in and takeaway. Holiday accommodation in B&B’s, hotels, caravan and camp sites and tourist attractions including theme parks cinemas and zoos will also see the reduction in vat.
I can’t see many businesses reducing prices though (as that would require a large investment in changing menus and tariff’s). Instead with prices remaining the same, the business will keep more of the income and pass less on the HMRC in the form of VAT. Don’t forget to update your default vat rates in Xero. If you need help with this please get in touch.
So what about helping individuals get spending again? WELL – The Eat Out To Help Out scheme has been announced. This will run for the whole of August 2020 on Mondays to Wednesdays only. If you eat out (not takeaway) at a participating restaurant you will get a 50% discount off your food bill (maximum of £10 per head – including the kids!) The voucher can be used towards the cost of the meal plus drinks (but not alcohol). You can register for the scheme from Monday 13th July – click here for the details.
Stamp Duty Holiday – Effective immediately and running until the end of March 2021, a home buyer in England won’t have any stamp duty (transaction tax) to pay on the first £500,000 of any property. Designed to stimulate transactions in the property market, this could save potential buyers as much as £15,000.
Green Home Grant – From September 2020 both homeowners and landlords will be able to apply for grants of up to £5,000, with those in lower income households grants are available up to £10,000. These are available to fund improvements to your property to make it more energy efficient. This is great for homeowners and landlords – but also great for all local tradesmen as there will be an increase in demand for their services.
Fingers crossed the economy will slowly begin to recover. Nobody knows what the future holds but please stay safe everyone and follow the very important guidance on social distancing. If you would like to discuss any of the points in this blog please get in touch.