Coronavirus: Mini-Budget July 2020…
Yesterday, 8 July, the Chancellor announced the latest initiatives designed to stimulate and support the economy in the wake of the Covid-19 pandemic.
We have summarised below the main elements of the announcements but in certain areas details are still to be announced.
Whilst not part of yesterday’s announcement it is worth reiterating that we are now in Phase 2 of the furlough scheme which allows part time furlough. Detailed rules have recently been issued. If you have salaried staff or staff who work fixed hours at a fixed rate then these are quite straight forward. If you have staff who work variable hours or who have variable rates of pay, the calculations are extremely complex and if you need any assistance in this area please contact us.
Return to Work Bonus
Full details to be announced by the end of July but essentially for each employee to whom the following applies:
– Must have been on furlough at some point
– Must still be employed at 31 January 2021
– Must earn at least £520 month on average between 1 November and 31 January
The employer will receive a £1,000 bonus per qualifying employee in February 2021.
It is worth noting that under the furlough 2 arrangements it is not possible to furlough an employee who has not previously completed a qualifying furlough period.
With immediate effect, until 31 March 2021, the rate of stamp duty on residential property transactions will be reduced to 0% for the first £500,000. In real terms this will give the following savings:
– On a £250,000 home save £2,500
– On a £500,000 home save £15,000
– On a £1 million home save £15,000
It should be noted that the 3% second home surcharge will still apply to all relevant transactions.
Green Homes Grant
Up to £5,000 per household funding to make homes more energy efficient (potentially £10,000 for low income households).
– Applies to both landlord and owner occupiers
– Government will fund 2/3 of qualifying expenditure
Young Workers Support (16-24)
– Kickstart scheme – if a young worker currently on Universal Credit is taken on working at least 25 hours per week on minimum wage the government will fund the wages of workers for 6 months
– Employers will be paid £1,000 per trainee for new trainees
– Employers will be paid £2,000 per new apprentice (£1,500 if over 25)
Specific relief for the Hospitality and Tourism Sector
Eat Out to Help Out
– A discount of 50% up to a maximum of £10 per meal for eat in customers at establishments serving food
– Applies Monday-Wednesday during August
– Does not apply to alcoholic drinks
– Businesses wishing to participate must register before 1 August. The relevant registration web site will be live from 13 July
– From Wednesday 15 July 2020 to 12 January 2021 VAT will be reduced from 20% to 5% on food, accommodation and attractions in the hospitality and tourism sectors
– The reduction does not apply to alcoholic drinks
The above is a summary of the current proposals. Updates and detailed guidance will be available shortly.
If you have any queries or require further information, please contact us.