Rishi Sunak delivered a Summer Statement today outlining the second phase of the Government’s coronavirus strategy with a focus on the plan for jobs. The headline measures of the announcements are:
Coronavirus Job Retention Bonus
The Chancellor confirmed that the Job Retention Scheme will come to an end on 31 October 2020 as previously announced, with employers able to use Flexi-Furlough from 1 July and the financial support gradually reducing each month from 1 August.
A new Job Retention Bonus has been announced to reward and incentivise employers to retain staff. Employers will receive £1,000 per employee that they bring back from furlough, provided that the are paid more than £520 per month from November 2020 through to January 2021, are brought back for considerable work (at least 25 hours per week) and are still employed at 31 January 2021.
A new Kickstart Scheme is to give young people the best chance to get a job. The scheme will pay employers to create new jobs for 16-24 year olds, the grant will cover 100% of the National Minimum Wage for six months, plus an amount to cover overheads, as long as the employer can prove these are new jobs. The grant could be worth up to £6,500 per job and employers can apply from next month. There is no cap of the number of places and all employers are urged to hire as many Kickstarters as possible.
Apprenticeships and Traineeships
The Government will pay employers to create apprenticeships for six months, they will pay £2,000 for new apprentices under 25, £1,500 for new apprentices 25 or over and £1,000 for traineeships (courses that include a work placement from 6 weeks to 6 months).
Stamp Duty Reduction – From Today
The Chancellor announced an immediate cut in Stamp Duty today increasing the threshold of no stamp duty on houses for the first £500,000 (up from £125,000) until 31 March 2021. This will be a significant saving for people moving or getting on the property ladder, saving thousands of pounds. Someone moving up the property ladder purchasing a home for £500,000 would have paid £15,000 in stamp duty, under the new threshold, they will pay nil.
Green Homes Grant
Green Homes vouchers will be provided to create energy efficient homes, the Government will provide up to two-thirds of the cost as a grant for energy efficiency, up to £5,000 (£10,000 for low income households) from September 2020. Further details will follow but is expected that this will cover costs such as double glazing, insulation, low energy lighting etc.
VAT Reduction – Hospitality and Tourism
From Wednesday 15 July 2020 VAT will be cut from 20% to 5% on hospitality food, accommodation and attractions until 12 January 2021.
Eat Out to Help Out Discount
To support restaurants and the people who work in them, for the month of August the Government will fund an Eat Out to Help Out discount. Meals eaten in participating businesses will receive a 50% discount on sit-down meals and non-alcoholic beverages, up to £10 per head on Mondays to Wednesdays, including children. The business will need to register and claim for the funds, but these will be paid through in 5 working days.
Self-employment Income Support Scheme
Please note that the deadline for claiming the first payment under the Self-employment Income Support Scheme is Monday 13 July 2020. The second claims are available from 17 August 2020.
Whilst the current pandemic has brought out the best in people, it also brings out the worst. Please be vigilant about scams, which mimic HMRC messages, do not give out private information or reply to text messages, emails or click links you are not expecting. HMRC will only request submissions through the Government Gateway and we would always recommend logging in independently through the gov.uk website and not via any links or invitations.
Please note these are headline announcements and further guidance will be provided by the Government on the details and implementation of each measure in due course.
Please do not hesitate to contact a member of the team, should you wish to discuss how these changes may affect you and your business or if we can assist with additional accounting needs at this unprecedented time.
Best wishes from all the Bailhache Linton team.