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Neils LimitedChartered AccountantsTel:01442 24 24 91 HemelTel:0208 343 6091 London

News

RECOVERY PHASE

 

08 July 2020 

 

THE  CHANCELLOR’S  ANNOUNCEMENT

The  recovery  phase has been announced as the  economy contracts by  25% in two months.

 

Coronavirus job retention bonus-  £1000 bonus per employee paid  to the employer

An employer who brings back an employee from furlough  through to January 2021 will be eligible for a bonus of £1,000 per employee.

 

Condition:  the employee must be paid at least  £520 in November and in December.

This  is equivalent to the lower earnings limit of NIC.

Policy decision

Job Retention Bonus – The government will introduce a one-off payment of £1,000 to UK employers for every furloughed employee who remains continuously employed through to the end of January 2021. Employees must earn above the Lower Earnings Limit (£520 per month) on average between the end of the Coronavirus Job Retention Scheme and the end of January 2021. Payments will be made from February 2021. Further detail about the scheme will be announced by the end of July.

 

 

Kickstart scheme 16-24 years old

The chancellor announced  the Kickstart scheme for employers who create new jobs for any 16-24 year old at risk of unemployment.

The government will pay wages for six months and  an amount for overheads, which will give employers a grant of around £6,500 for each employee.

Conditions:

  1. The jobs are  new jobs
  2. paid at national minimum wage
  3. for at least 25 hours a week.

Employers will be able to apply from  August 2020.

 

Apprenticeship

Over the next six months the government will pay employers to create new apprenticeships.

  1. A grant of £2,000 per apprentice hired will be paid by the government.
  2. There is a new bonus payment of £1,500 for hiring those aged over 25.

 

 

VAT cut for hospitality sector- restaurant and tourism   5% Rate

This is a  two-fold assistance

  1. VAT cut from 15 July to 12 January 2021, reducing the rate from 20% to 5% for six months.  This will impact on  food, accommodation, restaurant ,hot food takeaways, cinemas, zoos and theme parks ( tourist attractions)

 

 Catering and takeaway food

 

Although the supply of most food and drink of a kind used for human consumption is zero-rated, there are exceptions. Some items are always standard-rated and these are explained in Food products (VAT Notice 701/14). Other supplies are standard-rated or, between 15 July 2020 and 12 January 2021 reduced rated, because they’re made in the course of catering. This notice will help you decide the liability of your supplies.

This notice has been updated to reflect legislative changes that temporarily introduce a     5 % reduced rate on supplies of:

  • hot and cold food for consumption on the premises on which they are supplied
  • hot and cold non-alcoholic beverages for consumption on the premises on which they are supplied
  • hot takeaway food for consumption off the premises on which they are supplied
  • hot takeaway non-alcoholic beverages for consumption off the premises on which they are supplied
  • cold take-away drinks are still charged at  20%

 

However, any supplies of food and drink that are supplied as part of a supply of catering services for consumption off-premises remain standard rated. All references in this notice to “temporarily reduced rated” or “subject to a temporary reduced rate” are to supplies made between 15 July 2020 to 12 January 2021 that temporarily benefit from the reduced rate and which do not include any supplies of alcoholic beverages.

 

 

The chancellor says  ‘to get customers back into restaurants, cafes, and pubs and to protect the jobs of workers, for the month of August, we will give everyone an “eat out to help out” discount,’

  1. This discount  will apply to meals eaten at any participating business on Monday to Wednesday.  The customer will receive  50% off  their bill  up to a maximum of £10 per head. The government will start a website where business can register for the scheme online.  Claims will be paid  with 5 days. The record keeping will be  essential to  support any claim. We are hopeful that  cash register  providers will  implement new software to facilitate the claim.

 

You can use the Eat Out to Help Out Scheme to offer a discount to diners and encourage them to eat at your restaurant.

You can use the Eat Out to Help Out Scheme:

  • all day, every Monday, Tuesday and Wednesday from 3 to 31 August 2020

  • to offer a 50% discount, up to a maximum of £10 per person, to diners for food or non-alcoholic drinks to eat or drink in

  • to claim the money back from the government

There is no limit to the number of times customers can use the offer during the period of the scheme. Your customers cannot get a discount for someone who is not eating or drinking.

Alcohol and service charges are excluded from the offer.

Registration will close on 31 August.

Who can register

You can register if your establishment:

  • sells food for immediate consumption on the premises

  • provides its own dining area or shares a dining area with another establishment for eat-in meals

  • was registered as a food business with the relevant local authority on or before 7 July

You cannot register:

  • an establishment that only offers takeaway food or drink

  • catering services for private functions

  • a hotel that provides room service only

  • dining services (such as packaged dinner cruises)

  • mobile food vans or trailers

If your application is based on dishonest or inaccurate information, your registration will be revoked.

What you’ll need

To register, you must have:

  • the Government Gateway ID and password for your business (if you do not have one, you can create one when you register)

  • the name and address of each establishment to be registered, unless you are registering more than 25

  • the UK bank account number and sort code for the business (only provide bank account details where a BACS payment can be accepted)

  • the address on your bank account for the business (this is the address on your bank statements)

You may also need your:

  • VAT registration number (if applicable)

  • employer PAYE scheme reference number (if applicable)

  • Corporation Tax or Self Assessment unique taxpayer reference

 

Stamp duty  threshold raised to £500,000

Stamp duty is not payable on the first £500,000 on a property purchase.

This takes effect immediately and will last  till 31 March  2021. This  is only for residential properties.

 

The  %0  will apply to the first  £500,000 on a second property as well. But the  3% surcharge will aplly to  whole purchase.

 

The  Institute of Chartered Accountants Tax Faculty highlights that today’s announcement does not change the position for first-time buyers who already enjoyed a relief from SDLT on purchases up to £500,000.

However, it will temporarily reduce the amount of SDLT payable at the higher rate for additional dwellings. It will also reduce the amount of SDLT payable on transactions over £500,000 as the first £500,000 of chargeable consideration will benefit from the lower rates.

For example, if you brought a property that was not an additional property for £750,000 on 7 July 2020, the SDLT would have been £27,500. If you purchased the same property on 8 July 2020, the SDLT is £12,500.

The table below sets out how the rates have changed. 

 
Property value Standard rates Higher rates
  Rate up to 7 July 2020 Rate from 8 July 2020 to 31 March 2021 Rate up to 7 July 2020 Rate from 8 July 2020 to 31 March 2021
Up to £125,000 0% 0% 3% 3%
The next £125,000 (the portion from £125,001 to £250,000) 2% 0% 5% 3%
The next £250,000 (the portion from £250,001 to £500,000) 5% 0% 8% 3%
The next £425,000 (the portion from £501,001 to £925,000) 5% 5% 8% 8%

 

 

https://www.gov.uk/government/publications/revenue-and-customs-brief-10-2020-temporary-reduced-rate-of-vat-for-hospitality-holiday-accommodation-and-attractions/guidance-on-the-temporary-reduced-rate-of-vat-for-hospitality-holiday-accommodation-and-attractions#:~:text=On%208%20July%202020%2C%20the,2020%20to%2012%20January%202021.

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Making an appointment

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