"Mini-Budget" 2020: What you need to know...
A Summer "Mini-Budget" - offering a crucial and much needed boost to the UK economy in the aftermath of the Covid-19 pandemic, to include a focus on job retention and job creation. Here is more information on the key announcements to keep you up-to-date.
Coronavirus Job Retention Scheme (CJRS)
Following the staggered tapering of the CJRS support from 1 July 2020, the Government has announced a "Jobs Retention Bonus", where businesses will receive £1,000 per employee brought back from furlough, instead of making them redundant, when the furlough scheme ends in October.
In order to qualify, employees must be retained until at least 31 January 2021 and they must be paid above the Lower Earnings Limit, which is £520 per month.
Stamp Duty Land Tax (SDLT)
In England and Northern Ireland, the threshold for Residential Stamp Duty Land Tax (SDLT) has been increased as of Wednesday 8 July 2020 from £125,000 to £500,000. This means that no SDLT will be payable on properties costing less than £500,000 - as long as the purchase is completed before 31 March 2021. SDLT rate will then start at 5% for properties exceeding this threshold.
Those looking to buy second homes and buy-to-let properties can also take advantage of this temporary increase - but the 3% additional duty will still be payable on the full property price.
The Stamp Duty threshold will continue at this higher level until 31 March 2021.
Changes affecting the Hospitality and Tourism Industries
The Chancellor is introducing a temporary VAT reduction from 20% to 5% on:
• food and non-alcoholic drinks from restaurants, pubs and bars etc.
• accommodation in hotels, B&Bs, campsites/caravan sites
• admission to cinemas, theme parks and zoos
This will apply between 15 July 2020 and 12 January 2021 which may mean that businesses will have to account for two different VAT rates within the same VAT period.
"Eat Out to Help Out"
In order to kick-start the hospitality sector which has been severely affected by the pandemic, the Government has announced "Eat Out to Help Out" scheme, enabling the public to receive discount vouchers of 50% (up to £10 per head per meal) to eat out at cafes, pubs and restaurants from Mondays to Wednesdays during the month of August.
Businesses who wish to participate in this discount scheme will need to register online ahead of time - we believe the website will open next Monday.
Jobs, training and apprenticeships
There was a clear focus on supporting young people in accessing the job market, with three new initiatives announced:
• Kickstart Scheme: this is a £2 billion scheme for those aged between 16 and 24 and on Universal Credit. The scheme is designed to create thousands of 6-month placements (25 hours a week) where funding will cover the associated National Insurance contributions in full.
• Traineeships will be introduced in England for those aged between 16 and 24, where employers will receive £1,000 for every traineeship given.
• Apprenticeships: between 1 August 2020 and 31 January 2021, employers will receive £2,000 for each new apprentice hired under 25, and £1,500 for those aged 25+.
The Government's "Green Home Grant" scheme is designed to help upgrade homes to make them more energy efficient, which will include offering insulation vouchers of up to £5,000 per household. This scheme also has job creation in mind, with thousands of "green" jobs to be newly available.
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