What the Chancellor’s July statement means for you
On 8th July 2020 Rishi Sunak made a speech to Parliament that outlined a number of important measures to support businesses to recover from the Covid-19 pandemic – which he described as the ‘biggest threat to this country in decades.’
Here, we look at the main initiatives announced:
A ‘plan for jobs’
The Coronavirus Job Retention Scheme (CJRS) and Self-employment Income Support Scheme (SEISS) are being wound down. Sunak claimed that 11 million people had been supported through the crisis to date.
The furlough scheme will be now followed by a Job Retention Bonus. Employers will receive a one-off payment of £1,000 for each furloughed employee who is still employed as of 31 January 2021. To qualify, each employee must be paid at least £520 per month from November to January. Payments will be made from February 2021.
Support for young people
A £2 billion Kickstart Scheme aims to create high-quality, six-month placements for young people who are at risk of long-term unemployment. The idea is to help young people build confidence and skills in the workplace and gain valuable experience.
The Kickstart Scheme is for people aged 16-24 who are on Universal Credit and at risk of long-term unemployment. Government funding will pay 100% of the National Minimum Wage for 25 hours a week, plus national insurance contributions (NICs) and automatic enrolment pension contributions.
If your small business could benefit from essentially free, unqualified staff, keep an eye out for details. These are due to be released on the gov.uk website in the coming weeks.
Further help to find jobs and skills
The government has further plans to help people find jobs and gain skills. Activity will include a boost to the National Careers Service, enhanced work search support and £1,000 payments to employers giving trainees work experience, £2,000 to those who hire new apprentices aged under 25 and £1,500 for hiring older apprentices. Again, this present a good opportunity for small businesses.
Eat Out to Help Out
With the hospitality sector one of the worst-hit sectors since March, Sunak launched an ‘eat out to help out’ scheme, to encourage people to return to restaurants and cafés.
Customers will gain up to 50% off, up to £10 per head, on a meal at any participating café, restaurant or pub. The discount is unlimited and valid Monday to Wednesday on any eat-in meal during August across the UK. Participating establishments will be reimbursed for the 50% discount.
VAT cut in hospitality and travel
The Chancellor has cut the rate of VAT from 20% to 5% for a range of goods and services, including food and non-alcoholic drinks in bars and restaurants; hotel and holiday accommodation, plus admission to tourist and family attractions across the UK. The aim is to ‘bring back summer’ and encourage people to get out and boost the economy over the school holidays.
Temporary stamp duty reduction
Property sales fell by 50% in May and prices dropped for the first time in eight years. To help address this, the nil-rate band of residential Stamp Duty Land Tax (SDLT) will temporarily increase from £125,000 to £500,000 from 8 July 2020 to 31 March 2021 in England and Northern Ireland.
For more information on these new initiatives, visit the government website. To talk through how they might benefit your small business, contact our Peterborough accountancy team https://thobaniaccountants.co.uk/contact/ .