IN A SEEMINGLY DESPERATE BID, the UK Chancellor gave his Summer economic update today in Parliament to revive jobs and the boost the ailing economy following the outbreak of COVID-19 Coronavirus.
Along with a Stamp Duty holiday (£125k to £500k), a 15% VAT reduction for the catering/leisure industry he announced new job scheme subsidies for young unemployed workers. Here at Shipleys Tax Advisers we outline some of the plans below.
Stamp Duty Land Tax (SDLT)
- The current residential SDLT threshold of £125,000 will rise to £500,000.
- This will apply from 8 July 2020 until 31 March 2021.
- First-time buyers qualify for relief, whereby they pay less, or no tax, if the purchase price is £500,000 or less.
- Applies only to property purchased in England and Northern Ireland.
VAT: Temporary VAT cuts
The rate of VAT on food, accommodation, entry fees etc is cut from 20% to 5% for the next six months.
VAT on food and non-alcoholic drinks
- From 15 July 2020 to 12 January 2021, to support businesses and jobs in the hospitality sector.
- The reduced (5%) rate of VAT will apply to supplies of food and non-alcoholic drinks from restaurants, pubs, bars, cafés and similar premises across the UK.
- Further guidance on the scope of this relief will be published by HMRC in the coming days.
VAT on accommodation and attractions
- From 15 July 2020 to 12 January 2021, to support businesses and jobs.
- The reduced (5%) rate of VAT will apply to supplies of accommodation and admission to attractions across the UK.
- Further guidance on the scope of this relief will be published by HMRC in the coming days.
New Jobs Retention Bonus
- A new bonus of £1,000 will be paid to employers for bringing back and retaining furloughed employees until January 2021.
- Employees must be paid at least £520 per month.
Job Retention Scheme (JRS)
- The Employee Job Retention Scheme (JRS) is due to wind down and it will end in October 2020. The Chancellor has said “It is a false hope to keep furloughing open forever”.
Kickstart scheme
- The Kickstart scheme will pay employers who take 16 to 24-year-olds for a minimum of 25 hours per week at the National Minimum Wage (NMW).
- The grant will pay the wages or around up to £6,000 for the first six months.
- No cap on the number of places available.
Training places
- Pay employers £1,000 to take on new trainees.
- Apprentices: pay employers to create new apprenticeships, £2,000 per place.
- £1,500 payment for taking on apprentices aged over 25 years old.
Eat Out to Help Out
- The ‘Eat Out to Help Out’ scheme aims to encourage people to return to eating out.
- Every diner will be entitled to a 50% discount of up to £10 per head on their meal, at any participating restaurant, café, pub or other eligible food service establishments.
- The discount can be used unlimited times and will be valid Monday to Wednesday on any eat-in meal (including non-alcoholic drinks) for the entire month of August 2020 across the UK.
- Reclaimed by the business which must apply to participate.
If you need help with the issues above, please call Shipleys Tax Planning on 0114 272 4984 or email info@shipleystax.com – we are ready to assist.