In the Chancellor’s Winter Economy Plan that, rather than paying in full at the end of March 2021, businesses will be now able to choose to make 11 equal instalments over 2021-22.
This week, Chancellor Rishi Sunak announced a new wave of measures in the mini-budget to help get the UK economy back on track as we come out of lock-down.
- A ‘jobs retention bonus’ was announced. This bonus will be £1,000 per employee to encourage employers to retain staff and help prevent redundancies.
- A new ‘Kickstart Scheme’ will be launched to support young people coming into the workforce.
- Tourism and hospitality sectors are to receive a VAT cut from 15 July to 12 January 2021. The cut will be from 20% down to 5%.
- Stamp duty threshold has been increased to £500,000
- A greener recovery. The Chancellor announced a £3bn package of green investment to help create thousands of jobs.
The Job Retention Bonus
As the furlough scheme is expected to protect jobs until it winds up in October, the Chancellor expects this new bonus will help employers retain staff.
Employers will receive a £1,000 bonus for each furloughed employee they retain. The conditions state that the employee must be brought back and retained until January 2021, with the bonus payment being paid to employees in February 2021.
Further information will be announced on the scheme by the end of July.
The new multifaceted Kickstart Scheme will be launched to create new, fully subsidised jobs for young people across the country. It will be supported by a £2 billion fund.
Eligible young people will be aged from 16-24, claiming Universal Credit and at risk of long-term unemployment. Funding will be available for each six-month job placement. The funding will cover 100% of the National Minimum Wage for 25 hours a week with employers being able to top this up.
As part of this initiative, businesses will be given £2,000 for each new apprentice they hire under the age of 25. This is in addition to the existing £1,000 payment the Government already provides for new 16-18-year-old apprentices and those aged under 25 with an Education, Health and Care Plan.
The government will provide an additional £111 million this year for traineeships in England, to fund high quality work placements and training for 16-24 year olds.
The National Careers Service will get new funding – The government will provide an additional £32 million funding over the next 2 years for the National Careers Service, so that 269,000 more people in England can receive personalised advice on training and work, which is expected to benefit over a quarter of a million more young people.
Nearly £900 million will be invested to double the number of work coaches to 27,000.
Hospitality and Tourism sector benefit from VAT cuts
The hospitality and tourism sector has been badly hit by the COVID-19 pandemic. To help boost the sector the Chancellor has announced a VAT cut from 20% to 5% from 15th July to 12th January 2021.
Included in this reduction are:
- Supply of food
- Admission to attractions
However, it does not include alcohol served in pubs or restaurants.
Chancellor, Rishi Sunak also announced the introduction of the ‘eat out to help out’ scheme with a 50% voucher discount scheme commencing in August expected to be worth up to £10 per head when dining Monday – Wednesday.
Use of the discount will be unlimited while the scheme is live and businesses taking part will be reimbursed in full for the discount.
Stamp Duty increased to £500,000
The Nil Rate Band Residential Stamp Duty Land Tax (SDLT) will be increased in England and Northern Ireland from £125,000 to £500,000.
This will apply from 8 July 2020 to 31 March 2021. This will mean nearly nine out of ten people buying a home will pay no SDLT during this period.
A greener recovery
The Chancellor announced a £3bn package of green investment to help create thousands of jobs. He also announced that around £1bn has been set aside to help make public sector buildings greener.
Homeowners will be able to benefit from new grants to pay for ‘green’ upgrades to make their homes more energy efficient. Vouchers worth up to £5,000 will be issued whilst poorer households could benefit from up to £10,000 to make the upgrades, such as wall or loft insulation. The Chancellor expects these new grants to support more than 100,000 new jobs.
Up to £40m will be provided for a Green Jobs Challenge Fund with the objective of creating 5,000 jobs at environmental charities and public authorities. Some £100m of new funding has been set aside for direct air capture, a technology that takes carbon dioxide out of the air, while an extra £10m will be given for new electric car development projects.
If you require any clarification for your business and how you can take advantage of these mini-budget announcements, please do get in touch.