Sunak’s Summer Surprise
On 8th July 2020 the Chancellor, Rishi Sunak, announced the latest Government support for the economy and employment in response to the Coronavirus pandemic. With the furlough scheme coming to an end in October and businesses returning to the “new normal”, the measures announced yesterday will continue to provide support for businesses through to 2021.
The Job Retention Bonus
This is a one-off payment of £1,000 for each furloughed employee who remains continuously employed until 31 January 2021. The bonus will provide additional support to retain employees and will be paid to businesses which used the Coronavirus Job Retention Scheme (CJRS).
To be eligible for the £1,000, each previously furloughed employee will need to:
earn at least £520 per month (above the Lower Earnings Limit) on average for November, December and January
have been furloughed at any point by the employer and legitimately claimed for under the Coronavirus Job Retention Scheme
have been continuously employed by the employer up until at least 31 January 2021.
The scheme is expected to open for claims during February 2021. More information about this scheme will be available by 31 July 2020 and full guidance will be published in the Autumn.
Support for the hospitality and tourism sector
The Chancellor also announced other measures, including:
the Eat Out to Help Out Scheme – during August, diners can get 50% off Monday to Wednesday on meals and non-alcoholic drinks, up to £10 per person, when eating at participating restaurants, bars, cafes. That’s the diet out the window, then!
VAT reduction for hospitality and tourism – from next Wednesday, 15 July 2020 until 12 January 2021, the UK government will cut VAT from 20% to 5% on:
any eat-in or hot takeaway food and non-alcoholic drinks from restaurants, cafes and pubs;
all holiday accommodation in hotels, B&Bs, campsites and caravan sites; and
attractions like cinemas, theme parks and zoos.
Support for the housing market
The Government also announced an increase in the Stamp Duty Land Tax (SDLT) threshold in England and Northern Ireland – increasing the threshold under which no SDLT is paid on the purchase of a main home from £125,000 to £500,000, with immediate effect until 31 March 2021.
The additional 3% stamp duty for people owning more than one property, and for corporates, is not reduced.
Apprentices and Trainees
The Government announced further support for apprenticeships and work experience placements in England. It remains to be seen whether these will be available in Northern Ireland.
The Chancellor also announced the £2bn “Kickstart Scheme” to create hundreds of thousands of fully subsidised jobs for 16-24 year-olds. This will be aimed at young people at risk of long-term unemployment.
Updates on CJRS scheme
There are also some key changes to the CJRS scheme which you should be aware of:
Claiming for employees furloughed on or before 30 June
You will need to claim by 31 July for employees furloughed through the Coronavirus Job Retention Scheme (CJRS) for periods ending on or before 30 June i.e. before the new “flexible furlough” started.
Get ready for changes from 1 August
Employer contributions to the costs of employees on furlough start from 1 August and you will no longer be able to use a CJRS grant to cover National Insurance (NI) and pension contributions for furloughed employees from 1 August. You can submit your August claim in advance, from 20 July onwards.
Working out your claims
If you need assistance with calculating your furlough claims, please contact us and we would be delighted to help.
HMRC has now included a mechanism to delete a claim online within 72 hours of submitting it. Search 'claim for wages through Coronavirus Job Retention Scheme' on GOV.UK for more information.
If you have any questions on the Chancellor’s announcement, please don’t hesitate to contact one of our Directors.