Help and Support for Businesses and Individuals – Update
The Chancellor has recently announced the introduction of some new measures to support business and individuals, together with some changes to the existing schemes in place.
Coronavirus Job Retention Scheme (CJRS)
From 1 July, you can claim a more flexible grant for any employee you have previously received a CJRS grant for, and who now returns to work on reduced hours. You can also continue to claim for employees who stay fully furloughed. Please note that the scheme will end on 31 October 2020.
What you need to do next
- agree the hours and shift patterns that you want your employees to work from 1 July
- pay your employees’ wages for the time they’re in work and apply for a job retention scheme grant to cover the remainder of their usual hours for which they are still furloughed
- claim for further furlough periods as needed – the first time you will be able to make a claim for days in July will be 1 July.
Paying your employer National Insurance Contributions (NICs) and pension contributions
- A condition of the CJRS grant is that you pay the related PAYE tax, NICs and pension contributions due on wages. Until 31 July you can continue to claim these for the hours the employee is on furlough. From 1 August employers will no longer be able to claim for NICs and pension contributions.
- If you think you may struggle to pay your PAYE tax and/or NICs from August, please contact HMRC as soon as possible, before they start action to recover the unpaid debt. They may be able to give you time to pay.
Job Retention Bonus
The Chancellor has recently announced the introduction of the Job Retention Bonus.
This is a one-off payment of £1,000 to employers that have used the CJRS for each furloughed employee who remains continuously employed until 31 January 2021. The bonus will provide additional support to retain employees.
To be eligible, employees will need to:
- earn at least £520 per month (above the Lower Earnings Limit) on average for November, December and January
- have been furloughed at any point and legitimately claimed for under the Coronavirus Job Retention Scheme
- have been continuously employed up until at least 31 January 2021.
Employers will be able to claim the bonus from February 2021 once accurate RTI data to 31 January has been received. More information about this scheme will be available by 31 July and full guidance will be published in the Autumn.
Reduced Rate of VAT for Hospitality, Accommodation and Attractions
The Chancellor announced a six-month reduction in the VAT rate on supplies of food and non-alcoholic drinks from restaurants, pubs, bars and cafés, as well as to supplies of accommodation and admission to tourist attractions.
The rate cut from 20% to 5% will take effect on 15 July 2020 and will be in place until 12 January 2021 to support businesses and jobs in the hospitality sector across the UK.
Further guidance on the scope of the reliefs will be published by HMRC in the coming days.
The “Kickstart Scheme” has also been introduced. The fund will subsidise six-month work placements for people on Universal Credit aged between 16 and 24, who are at risk of long-term unemployment.
For each “kickstarter” job, the government will cover the cost of 25 hours’ work a week at the National Minimum Wage – £4.55 for under 18s, £6.45 for 18 to 20-year-olds, and £8.20 for 21 to 24-year-olds.
Employers will be able to top up that payment if they wish.
The scheme will open for applications in August, with the first jobs expected to start in the Autumn and run until December 2021 – with the option of being extended.
Reduction of Stamp Duty Land Tax (SDLT) Rates
an increase in the Stamp Duty Land Tax (SDLT) threshold in England and Northern Ireland – increasing the threshold under which no SDLT is paid on the purchase of a main home from £125,000 to £500,000, with immediate effect until 31 March 2021.
Please see https://www.gov.uk/guidance/stamp-duty-land-tax-temporary-reduced-rates for further details.
Extension to the Self Employment Income Support Scheme
This scheme is being extended until 19 October 2020. You’ll be able to claim a second and final grant from 17 August 2020 when the online service will be available.
HMRC will work out your eligibility the same way as the first grant. If you make a claim for the second grant you will have to confirm your business has been adversely affected on or after 14 July 2020.
This grant will be a taxable grant worth 70% of your average monthly trading profits, paid out in a single instalment covering a further 3 months’ worth of profits, and capped at £6,570 in total.
You can claim for the second and final grant, even if you did not make a claim for the first grant.
More guidance will be published in the coming days and we will endeavour to keep our news items updated. In the meantime, it is worth checking the www.gov.uk website.
As always, do let us know if you have any queries or require any assistance.