The Chancellor announced his Summer Statement on 8 July. This is the second phase of the Governmentâ€™s economic plan to battle the Coronavirus pandemic.
This Plan for Jobs aims to protect, support and boost job creation in the UK. The third phase of the Government’s plan will be set out in the Autumn with measures to support the economy’s long-term recovery through a Budget and a Spending Review.
The second phase of the Government’s support package includes:
Job Retention Bonus Scheme – The Coronavirus Job Retention Scheme (CJRS) (which has been open since March and is due to end in October) has supported over one million employers to protect over 9 million jobs. The Government is introducing a new policy to reward employers for bringing employees back to work. The Government will make a one-off payment of £1,000 to UK employers for every furloughed employee who remains continuously employed through to the end of January 2021. Employees must earn above £520 per month (the Lower Earnings Limit) on average between the end of the CJRS and the end of January 2021. Payments will be made from February 2021. Further details about the scheme are due to be announced by the end of July 2020.
The details of the scheme will be important, as employers will have to consider whether there is sufficient work to justify paying at least £1,560 to retain an employee to obtain this bonus.
Kick Start Scheme – The Government will introduce a new scheme in Great Britain aimed at those aged between 16-24 who are on Universal Credits and are deemed to be at risk of long-term unemployment. To qualify for the scheme, new employees must work a minimum of 25 hours per week at the national minimum wage. The scheme will reimburse 100% of the costs to the employer to include employer’s National Insurance Contributions plus employer’s auto enrolment contributions for six months.
Apprenticeship Funding – A payment of £2,000 to employers for new apprentices hired aged under 25, and a £1,500 payment for new apprentice aged 25 and over from 1st August 2020 to 31st January 2021. These are in addition to the £1,000 payments that already exist for 16-18 year old apprentices, and those aged under 25. This has initially been announced for England, and we await confirmation from Stormont on whether there will be any such support for employers in Northern Ireland.
This refers to Great Britain and not Northern Ireland. The Barnett formula should mean that the appropriate funds are made available to Stormont. We will have to wait how the funds are utilised.
Eat Out To Help Out – This scheme was announced to encourage people to return to cafés, restaurants, pubs, and other food establishments. Diners will be entitled to receive a 50% discount up to £10 per head (including children) on meals and non-alcoholic beverages at any registered business. The discount is available Monday to Wednesday for an eat-in meal for the month of August across the UK, and has an unlimited usage. Eligible businesses will need to register via a new online portal which is to be released on Monday 13th July 2020 to be reimbursed for the discount.
Temporary VAT Cut – From 15th July 2020 to 12th January 2021, the standard rate of VAT which currently applies to the supply of food and non-alcoholic drinks purchased in restaurants, bars, cafés and similar establishments will be reduced from 20% to 5%. This reduced rate will also apply to the supply of accommodation and admission to attractions across the UK.
Further guidance will be published by HMRC which will provide more detail on the scope of this relief. It will be welcomed by the sectors that have been hit hard by the Covid-19 restrictions.
Stamp Duty Land Tax (SDLT) Temporary Cut – The Nil rate band for SDLT on residential properties in England and Northern Ireland will increase temporarily from £125,000 to £500,000 with immediate effect. The new rules will apply until 31 March 2021. For example, an individual purchasing a property which costs £600,000 will pay SDLT at 5%, generating an SDLT liability of £5,000. Under the old rules, the SDLT liability would be £20,000. Please note the 3% surcharge will still apply to the purchase of additional residential properties.
This will be welcomed by many estate agents and potential buyers especially buyers having to save larger deposits to obtain mortgages.
Greener Home Grant – This scheme was announced to encourage homeowners and landlords to make their residential properties more energy efficient. A grant will be available to claim for up to two thirds of the cost up to a maximum £5,000 per household. A grant of up to £10,000 will apply for low income households This scheme has been announced for England. We await an announcement from Stormont on whether any similar scheme will be made available for Northern Ireland.
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