Loads of announcements yesterday and lots to take in.
Here is my summary of how this will affect my clients – and what we still need some guidance on:
Job Retention Scheme:
We have final confirmation that this will end in October 2020 with the gradual wind down already announced.
However, the Job Retention Bonus has been announced.
Under this, the government will pay a £1,000 bonus to employers for each furloughed employee that they retain until January 2021. The employee must earn at least £520 per month between November and January 2021. The bonus will be paid in February.
More detail on this is due to be announced soon and clarification is needed around directors. There is nothing at the moment to say that a furloughed director returning to work is excluded, but we will need to wait and see.
This scheme is to encourage employers to take on 16-24 year olds.
To qualify, it must be a new job, paying national minimum wage and be for at least 25 hours per week. If these are met, the government will pay these employees wages for 6 months. It does appear that they will only pay the relevant NMW for these employees, so if you pay these new employees above the NMW, this may not be covered. Again, we need more details to be announced to confirm.
Trainees and Apprenticeships
From August, £1,000 is to be paid for new trainees and £2000 for employers who create new apprenticeships for the under 25’s. And additional £1,500 will be paid for taking on apprenticeships aged over 25.
The VAT on food and accommodation is being cut from 20% to 5% for the next 6 months starting on 15 July.
The reduced rate will apply to supplies of food and non-alcoholic drinks from restaurants, pubs and cafes.
Further guidance on the full scope of this relief will be published in the next few days. Accounting for this one is going to be fun!!
Eat out to Help out
This one really wasn’t expected and aims to encourage us to go back out to our local restaurants.
Every diner will get 50% of their meal and non-alcoholic drinks, up to £10 per head, from any participating establishment for the month of August.
The discount has unlimited use and can be used on Monday – Wednesdays. The restaurant will then reclaim the money from the government which it can do weekly. More accounting fun!!
Stamp Duty Cut
The current threshold of £125,000 will rise to £500,000 from 8 July 2020 to 31 March 2021 so there will be no stamp duty on the first £500,000 of the purchase price (for your sole property.) Above this rate, the percentages remain unchanged, but this potentially saves £15,000 on a property over £500,000.
All these measures are designed to get the economy moving again, in the face of the massive predicted economic recession.
The next budget is in the Autumn, when no doubt we will find out, how we are all going to pay for this!
If you have any queries, then please contact Rosie Forsyth at Wilkins & Co.