CORONAVIRUS (COVID-19) – UPDATED 9 JULY 2020

There have been a number of new developments to government measures aimed at supporting businesses through the Covid-19 crises. Here follows a summary of some of the latest key changes and announcements made by the government.

On Wednesday 8th July, the Chancellor Rishi Sunak made a speech entitled “Summer Economic Update” where he unveiled further Government measures for support.

CORONAVIRUS JOB RETENTION SCHEME (CJRS) AND JOB RETENTION BONUS
From 1 July it has been possible to ‘flexibly furlough’ employees who have previously been furloughed for a period of three continuous weeks prior to 30 June. This means employees can come back part time and you can claim furlough pay for the usual hours not worked by the employee. The rules for flexible furlough are fairly complicated and so it would a good idea to speak to us before making anyone flexibly furloughed to ensure you are able to reclaim it from HMRC.

It is recommended that employers obtain in writing the consent of employee’s to be flexibly furloughed.

The CJRS ends in October and the Chancellor looked to cushion expected redundancies with the announcement of a Job Retention Bonus (JRB). The new scheme will give employers £1,000 for each previously furloughed employee they retain and keep in employment until January 2021, as long as they are paid at least £520 a month. Further details of the scheme are expected later in July.

KICKSTART SCHEME AND MEASURES TO HELP PEOPLE FIND WORK
In order to support people finding jobs, the Chancellor announced the Kickstart Scheme, which will provide £2 billion to support the creation of “high quality” six-month work placements for 16 to 24-year-olds on Universal Credit and at risk of long-term unemployment.

The Government will provide employers that offer the placements funding equivalent to 100 per cent of the relevant level of the National Minimum Wage (NMW) for 25 hours a week. It will also cover the associated Employer NICs and minimum automatic enrolment pension contributions.

Rishi Sunak also outlined additional measures, including funding for traineeships and employers that hire new apprentices, as well as funding for several careers and job-finding programmes.

The apprenticeships funding will provide £2,000 to employers in England for every apprentice hired under the age of 25 and £1,500 for each newly hired apprentice aged 25 or older. This funding is in addition to schemes already in place to support employers in taking on apprentices.

VALUE ADDED TAX REDUCED RATE FOR HOSPITALITY AND TOURISM SECTORS
The Chancellor outlined a VAT rate cut for the Hospitality and Tourism sectors from 20% to 5%. The measures relate specifically to food and non-alcoholic drinks and to accommodation and admission to attractions, with further details expected to be published later.

If you are a restaurant, pub or café and serve alcoholic drinks you will need to ensure your till system shows these separately to food and nonalcoholic drinks. We are also currently presuming billed service charges will remain at 20% so these will also need to be shown separately on tills.

The VAT rate change comes into effect on Wednesday 15 July 2020 and will be in place temporarily until 12 January 2021.

EAT OUT TO HELP OUT
The “Eat Out to Help Out” scheme will provide a discount of 50 per cent of up to £10 a person on eat-in meals, including non-alcoholic drinks, at participating establishments on Mondays, Tuesdays and Wednesdays for the month of August.

Restaurants, cafes and pubs can sign-up for the scheme on a new website on Monday 13 July 2020.

STAMP DUTY LAND TAX HOLIDAY AND JOB CREATION MEASURES
There is a temporary cut in Stamp Duty Land Tax (SDLT) from 8 July by raising the nil-rate band from £125,000 to £500,000 until 31 March 2021.

The 3% higher rate for purchases of additional dwellings applies on top of revised standard rates above for the period 8 July 2020 to 31 March 2021.

Further details can be found on SDLT changes here

SELF EMPLOYED INCOME SUPPORT SCHEME
The scheme is being extended. If you are eligible for the second and final grant and your business has been adversely affected by Covid-19 on or after 14th July 2020 you will be able to make a claim from 17 August 2020. You can make a claim for the second grant if you are eligible, even if you did not make a claim for the first grant.

The second grant will worth 70% of your average monthly trading profits, paid out in a single instalment covering a further 3 months’ worth of profits and capped at £6,570 in total.

If you have any questions, please do get in touch.

Best wishes, and stay safe and healthy
Andy, Simon, Jo, Hannah and the team

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