The Chancellor Rishi Sunak has announced a range of employment and tax incentives in his Summer Statement aimed at speeding the recovery of the UK from the economic effects of Coronavirus. These measures range across several different sectors, helping businesses and increasing consumer confidence.
Furlough Staff Retention Bonus
The Chancellor reiterated in his speech that the Coronavirus Job Retention Scheme (CJRS) will close at the end of October 2020. To encourage businesses to retain their furloughed staff after this date, the Government will pay employers a £1,000 bonus for every staff member who returns from furlough and is still employed at 31 January 2021.
The bonus will apply to any worker, anywhere in the UK, earning over £520/month between now and the end of January 2021. It is a one-off payment that is only payable to workers who were furloughed. We expect full details of how the scheme will work by the end of July 2020.
6 Month VAT Cut
The rate of VAT is being cut from 20% to 5% for certain businesses within the hospitality sector. The cut is temporary, lasting from 13 July 2020 until 12 January 2021. Included in the list of businesses who will qualify for the cut are:
- Hotels and B&Bs
- Theme Parks and Cinemas
- Restaurants, Pubs and Cafes (although this will only cover food and non-alcoholic beverages)
Businesses in the hospitality sector have been some of the hardest hit by the UK lockdown. As a result, it is predicted that this VAT cut will largely not be passed on to consumers as price reductions. Instead businesses will keep prices at or near previous levels in a bid to recoup some of their recent losses.
Young Worker Support
The Government have announced a “Kick Start Scheme”, which is a £2bn fund to pay for work placements for 16-24 year olds who are on Universal Credit. These work placements will be six months long and payments from the fund will cover the National Minimum Wage for a 25-hour week, including both Pension and National Insurance contributions.
Grants are also being made available for trainees and apprentices, starting from 1 August 2020 in England only.
Stamp Duty Holiday
The zero rate threshold for Stamp Duty Land Tax has been raised to £500,000 from 8 July 2020 until 31 March 2021. This will take 90% of main home purchases out of the scope of Stamp Duty and is intended to boost the flagging housing market. For further details see our dedicated article on the Stamp Duty changes.
“Eat Out to Help Out” Scheme
Finally, in an attempt to stimulate the restaurant sector, the Government have announced a scheme which will offer a 50% discount for diners eating out in August. The discount will be available on Mondays, Tuesdays and Wednesdays throughout the month and will cover both food and non-alcoholic drinks.
The discount will be capped at £10 per head but there will be no limit on how many times it can be claimed. It will only apply at participating restaurants, cafes or other eateries who will be able to claim it back from the Government in full. In order to become a participating venue, owners will have to apply via an online form which will be available from 13 July 2020. For more details, owners should visit:
If you have questions on any of the announcements, please contact us today for advice and assistance from one of our expert solicitors.
The Backhouse Solicitors Team
Tel: 01245 893400
Email: [email protected]
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