On 8 July, Rishi Sunak delivered a mini budget which will forever be remembered for the last of his policies where he encourages us all to ‘Eat Out to Help Out’. What this policy eventually gets called is anyone’s guess – my bet is on having a ‘Boris Burger’, but I am sure smarter people than I will come up with something better.
Of course, the aim of these policies is to stimulate growth by rewarding employers for employing people, reduce the cost of moving and encourage us all to spend money going out and enjoying ourselves. We have provided a short synopsis of the policies that were announced below and will follow up with more details once they become available.
As always, if you have any questions, we at CBW are here to help you, so please do not hesitate to get in touch.
Coronavirus Job Retention Scheme (CJRS)
The scheme has been open since March 2020 and it was confirmed that this will close on 31 October 2020 as planned.
However, to encourage employers to retain those employees once the furlough scheme ends, the Government announced a one-off payment of £1,000 to be paid to UK employers for every furloughed employee (without a cap) if the following two conditions are met:
- The employee must remain in continuous employment through to the end of January 2021
- Employees must be earning more than £520 per month on average between October and January 2021
Payments are likely to be made in February 2021.
Like the CJRS itself, the bonus will almost certainly be taxable as income of the business.
The Chancellor announced a new scheme which will cover 100% of the relevant National Minimum Wage for 25 hours per week, plus the associated employer National Insurance contributions and employer minimum automatic enrolment for employers who employ 16-24 year olds who are currently receiving Universal Credit. The job must be for a minimum of 6 months.
Employers who provide trainees with work experience will benefit from £1,000 per trainee.
Currently, employers in England are able to benefit from £1,000 paid by the Government for apprentices between 16-18 year olds. The Government have announced that further payments will be made available for new apprentices hired from 1 August 2020 – 31 January 2021 with the promise that:
- If aged under 25 a payment of £2,000 will be made
- If aged over 25 a payment of £1,000 will be made
Temporary VAT Cut
With effect from 15 July 2020 and running to 12 January 2021, VAT will be reduced from 20% to 5% on:
- food and non-alcoholic drinks from restaurants, pubs, bars, cafes and similar premises; and
- accommodation and admission to attractions
We await further guidance as it is not clear how they are going to be able to do this.
Eat Out to Help Out – August 2020
In an attempt to entice people to return to eating out and support the hospitality sector, the Government are rolling out a new scheme for the entire month of August. The new scheme will be available at any participating restaurant, café, pub or other eligible food service establishment. To take part in the scheme, they must apply.
What we know about the scheme so far:
- Entitles every diner up to 50% discount per head on a meal, limited to £10 per person
- Scheme discount is valid Monday to Wednesday
- There is no limit on the number of times a person can use the discount
- Available on eat in meals and can cover non-alcoholic drinks
The Government have not released the mechanics of how businesses will reclaim the difference from applying this scheme, or the turnaround.
England and Northern Ireland Property
The residential property sector is fundamental to the UK economy from those involved in the building, buying and selling of houses, to those that finance them, renovate them and sell homeowners stuff to put in them, it is perhaps the only sector that affects us all.
So with the news that the market has seen its first year on year fall in value in eight years, according to Nationwide, along with an overarching need to stimulate the market to retain the jobs it creates, the Chancellor has announced an extension of the nil rate band for SDLT from £125,000 to £500,000. The change is effective from 8 July 2020 and will run to 31 March 2021.
The extension is available to everyone including first time buyers, buy-to-lets, companies, trusts and those just moving house. This means that anyone who buys a residential property for less than £500,000 will not pay any SDLT at all unless they are caught by the 3% additional rate. This applies where you buy a second home or the property is bought by a company or a trust.
The increase in the nil rate band amounts to a saving of up to £15,000.
Green Home Grants
The Government is encouraging all homeowners to invest in becoming more energy efficient. The grant will provide at least £2 for every £1 homeowners or landlords spend, capped at £5,000.
The scheme will fully fund energy efficient measures of up to £10,000 for those on the lowest income.
If you have any questions regarding the announcements made in the statement, please get in touch with our tax team.