Summer Economic Update
Rishi Sunak, UK Chancellor of the Exchequer, has announced a host of new measures designed to mitigate the impact of the COVID-19 pandemic by encouraging job creation and customer spending. The Summer Economic Update made on Wednesday 8 July included the following schemes:
- Job Retention Bonus
- Kickstart Scheme
- Reduced Rate VAT
- Stamp Duty Cut
- Eat Out to Help Out
- Enhanced Apprenticeship Scheme
Green Homes Grant Scheme
Only summary details are currently available and are included below. We will provide further details as they become available. A summary of the announcement can be found here. Useful links to UK Government guidance and our previous updates can be found at the end of this article.
Job Retention Bonus
To follow the Coronavirus Job Retention Scheme, which will become flexible and wind down and end on 31 October, a Job Retention Bonus has been introduced. Any employer who brings back a furloughed member of staff through to 31 January 2021 will receive a £1,000 bonus per employee. This is conditional on the employee being paid at least £520 per month in November and December. There is no limit to the number of employees a £1,000 bonus can be received for.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.
The government will pay grants covering young people’s wages for 6 months, plus an amount for overheads, amounting to employers receiving a grant of around £6,500 for each employee taken on. Individuals aged between 16 and 24, claiming Universal Credit and at risk of long-term unemployment, will be eligible to be employed under this scheme. The funding is conditional on the jobs being new, paid at National Minimum Wage and for at least 25 hours a week. The grant will be available for the first 6 months of employment, cover 100% of the National Minimum Wage for 25 hours a week, and will allow employers to top this wage up.
Employers will be able to apply for the scheme from August, with the first Kickstarters in jobs from the autumn.
Reduced Rate of VAT
The rate of VAT applied on most tourism and hospitality-related activities will be cut from 20% to 5%. This will cover businesses providing food, accommodation, eat in or hot takeaways, cinemas, zoos and theme parks. The VAT cut is temporary and will apply between 15 July 2020 to 12 January 2021. We will be issuing a guide on how to account for this change in the rate of VAT in your accounting system and VAT workings soon.
Stamp Duty Cut
With immediate effect, there is a temporary increase to the Nil Rate Band of Residential SDLT (Stamp Duty) from £125,000 to £500,000 until 31 March 2021. Any residential property purchased for £500,000 or less will not result in Stamp Duty being due.
Eat Out to Help Out
From Monday to Wednesday every week throughout August 2020 a new Eat Out to Help Out discount scheme applies. Individuals eating out for sit-down meals in cafes, restaurants and pubs will receive a 50% discount up to a maximum of £10 per head (at participating establishments only). This discount will be paid for by the UK Government and businesses will need to register for this scheme.
Enhanced Apprenticeship Scheme
Employers will be given £2,000 for each new apprentice they hire under the age of 25. This amount is in addition to the existing £1,000 payment the Government already provides for new 16 to 18 year old apprentices and those aged under 25 with an Education, Health and Care Plan.
Green Homes Grant Scheme
From September homeowners and landlords in England will be able to apply for vouchers from a £2 billion Green Homes Grant scheme this year, to pay for green improvements such as loft, wall and floor insulation. The government will cover two thirds of the cost up to £5,000 per household, and up to £10,000 for those on low incomes.
A UK Government business support website can be found here. It contains guidance on all Coronavirus financial measures and business advice.
A UK Government general COVID-19 support website can be found here. It contains guidance on all matters pertaining to the Coronavirus.