During the coronavirus lockdown businesses have seen numerous different support schemes introduced to help them manage the financial impacts of the coronavirus lockdown.
On 8 July, Chancellor Rishi Sunak stood in the House of Commons talking about the gradual reopening of the economy, with several lockdown restrictions being lowered on 4 July.
However, this wasn’t an official budget speech or fiscal statement. It didn’t last very long, around half an hour, but we heard of the three point plan for jobs.
This second phase of support is aimed to protect support and create jobs. the government wants to keep employment levels as high as possible as the country faces the challenges of a deep global recession.
The governments are keen to get people out and about spending again despite concerns over personal health and safety.
Additional support has been welcomed by businesses, many are thankful for the government schemes such as furlough payments and self-employed income support, but these are set to close on 31 October.
Our latest blog explains all of the latest support available post-Covid-19, read on to find all you need to know.
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What has happened to VAT in the hospitality and tourism sector?
There has been a temporary cut of Vat for food accommodation and attractions, the rate has been cut from 20% to 5%.
The reduction started on 15 July 2020 and will last up until 12 January 2021. This reduced rate applies to supplies of food and non-alcoholic drinks from restaurants, pubs, bars, cafes and similar premises, and also to establishments such as hotels and B&B’s and admission to attractions.
Whilst this has being introduced to stimulate customer activity within the industry, it could also increase complexity for the businesses it aims to help.
so might struggle with varying rates of VAT on different products and services they offer, as well as ensuring they keep up to date with old invoices that use the original 20% rate.
there might also be cash flow problems for businesses that are not set aside their VAT payments and now need to pay the 20% due for previous quarters, but they are only collecting 5% from consumers.
What is the furlough bonus scheme?
During his speech, Rishi Sunak took the opportunity to confirm that the coronavirus job retention scheme ends on 31 October and will not be extended.
He then also announced an incentive for businesses to bring back currently furloughed staff, and then keep them in employment over the next six months.
Those businesses that do keep furloughed staff on until the end of January 2021 will be able to claim a job retention bonus of up to £1000 per employee.
Businesses will only be eligible for this if their workers are paid at least £520 a month during the 2nd and final phase of the furlough scheme which is the lower earnings limit for National Insurance contributions from November 2020 to January 2021. The payments of the bonus are expected to be made from February 2021.
What is the kickstart scheme?
The kick start scheme has been introduced for supporting jobs for the younger generation.
it was made clear during the speech that under 25 are two and a half times as likely to wear in a sector that has been closed during lockdown.
This scheme incentivises employers to offer six months’ work placements to people aged between 16 and 24, and to those who are on Universal Credit.
The scheme will offer funding for each placement covering 100% of the national minimum wage for 25 hours per week, as well as the associated employer National Insurance contributions and minimum automatic enrolment contributions.
What about traineeships and apprenticeships?
The Government also wants employers to offer work experience to young people. This can be in the form of traineeships, employers offering these traineeships will receive a £1000 bonus for each trainee they take on.
In addition to this, from 1 August 2020 until 31 January 2021, employers will receive a payment for hiring apprentices. They will get:
- £2,000 for each apprentice under the age of 25
- £1,500 for new apprentices over 25.
These bonuses do not replace the existing £1,000 payment the government already provides for 16-18-year-old new apprentices, and also those aged under 25 with an education, health and care plan.
What is eat out to help out?
The eat out to help out scheme will offer diners a 50% of up to £10 per head on meals and or drinks at participating businesses.
Restaurants, cafes, pubs and other food service firms can sign up, let customers pay half price and then be reimbursed.
It can be used unlimited times and runs from Mondays to Wednesdays throughout the month.
To be eligible, the business must sell food for immediate consumption its premises, rather than a takeout. It also can’t share a dining area with another establishment for eat-in meals and needs to be registered before 7 July 2020.
Takeaway establishments, dining and catering services and mobile food vans cannot join the scheme.
Any other announcements?
There has been a stamp duty land tax holiday, raising the lower threshold at which the tax is due from £125,000 to £500,000 for transactions between 8 July 2020 and 31 March 2021.
Stamp duty land tax applies to the transfer of residential properties in England and Northern Ireland.
Furthermore, a green homes grant is being made available to homeowners and landlords from September, providing a minimum of £2 for every £1 spent on making residential properties more energy efficient.
Up to £5,000 per household will be covered, and even up to £10,000 for lower-income households.
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