On the 8th July 2020 the chancellor, Rishi Sunak gave his Summer Statement.
Here is our round-up of the highlights:
Furlough ‘Bonus’
Whilst the furlough scheme was confirmed to still be ending in October, the Chancellor announced that employers would receive £1000 for each employee that they have brought back from furlough, provided they are:
- Earning at least £520 on average each month between November 2020 and January 2021
- Still employed at the end of January 2021
Payments are then planned to be made from February 2021. We await further details at the end of July.
We see no reason based on the information available, that furloughed directors would not also be entitled to this bonus.
Kickstarter Scheme for Employers
The Chancellor announced incentives to take on young people (under 25) for a minimum of 25 hours per week.
The scheme will cover their wages (at minimum wage) and an amount for national insurance and pension costs, for a 6 month period. To avoid abuse, firms must prove these jobs are new, and additional, not redeploying existing workers into this scheme.
Applications are due to open in August. In addition to this scheme, the Chancellor encouraged employers to create new apprenticeships by offering grants of £2000 per apprentice under 25, and a grant of £1500 if they hire apprentices aged 25 and over.
VAT cut for the hospitality sector
Pubs, restaurants, cafes and B&Bs will be able to reduce VAT on their eat-in, hot food and non-alcoholic drinks from 20% to 5% from the 15th July. This will be in place until 12th January.
Food and drink supplied as part of catering services for consumption off the premises continue to be standard rated.
This new rate will also apply to accommodation, and admission to attractions like cinemas, theme parks and zoos.
We await, and will update on the detailed guidance, as there are several technical points that need clarifying (as is often the case with VAT!).
Stamp Duty Cut
This is a big one for anyone looking to move shortly. This immediate change will mean stamp duty will not be payable on property valued up to £500,000 (up from £125,000).
We await further guidance but the initial information suggests the additional 3% for owning further property will still apply (sorry landlords!).
Eat Out to Help Out
In an interesting announcement, everyone in the UK will be able to apply for a 50% discount (capped at £10 per head) off their meals at any participating restaurant, café, pub or eligible business, Monday – Wednesday.
Businesses will be able to register for the scheme from Monday 13th and claim for reimbursement every week during August. Summary details suggest payments will then arrive within five working days.
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If you have any questions around how this impacts your business, please Contact Us – we’d love to chat.