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Chancellor’s Update – July 2020

09 July 2020 • HMRC News

Here is a review of the headline announcements from the Chancellor’s most recent statement to the House of Commons regarding the additional measures being implemented to support the opening up of the UK economy.

The Furlough Scheme Bonus

The phased withdrawal of the furlough scheme is to continue as previously announced, coming to an end in October 2020.

In order to encourage employers to bring their furloughed employees back to work, the Chancellor has committed to pay the Employer £1,000 per employee.

There are conditions to be met before the bonus will be paid including a minimum salary requirement and employees remaining on the payroll until January 2021.

The Kickstart Scheme

A further announcement to encourage Employers to take on 16 to 24 year olds is known as the KickStart Scheme.  The Treasury will support Employers with funding where new jobs are created which are in excess of 25 hours per week.

The funding is expected to last six months and will apply from next month.  The Chancellor announced there is to be no cap on the number of new KickStart employees.

Apprenticeships

The current apprenticeships arrangements are to be extended for the next six months with bonus payments being made to Employers for taking on new apprentices.  The bonuses will be £2,000 per apprentice under 25 years old and £1,500 per apprentice aged over 25.

Energy Efficiency Vouchers

In order to encourage homeowners and Landlords to invest in energy efficient infrastructure and thereby increase work for those in these sectors, grants of up to £5,000 will be available to cover up to 2/3rds of the cost of increasing energy efficiencies.

Stamp Duty Land Tax (SDLT)

In order to encourage movement in the housing market, the Chancellor also announced an increase to the lower SDLT band from £125,000 to £500,000 for the period 8 July 2020 to 31 March 2021.  This means that homebuyers will not pay SDLT on the first £500,000 on the acquisition of a new home.

For those acquiring additional residential property, the 3% surcharge will still apply in the period to 31 March 2021.

VAT Rate Reduction

To also encourage further spending on the hospitality and tourism industry, there has been a VAT rate cut up to 12 January 2021.

The applicable rate will be 5% instead of the standard rate of 20% during this period.

Eat Out to Help Out

The final announcement by Mr Sunak was this innovative discount scheme which is to apply for the month of August.

In addition to the reduction in the VAT rate for these establishments, diners will be able to claim a discount of up to £10 per person on food and non-alcoholic beverages when eating out on a Monday, Tuesday or Wednesday in August.

The pub or restaurant will be able to apply to be part of the scheme by registering online and then claim back the cost of the discounts applied direct to the Treasury for reimbursement within 5 days.

If you would like to discuss any of the above please call 020 7731 6163 to talk to a member of our tax team or get in touch with your usual Warrener Stewart contact.

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