ECONOMIC RECOVERY AND FURLOUGH
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.
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.
Employers will be able to apply from August 2020.
Over the next six months the government will pay employers to create new apprenticeships.
VAT cut for hospitality sector- restaurant and tourism 5% Rate
This is a two-fold assistance
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:
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,’
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.
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.
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%|
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