A Plan for Jobs – New Government Support for Businesses
The Chancellor’s summer statement on 8 July 2020 announced a number of measures to support, protect and create jobs. These measures are said to amount to up to £30 billion of support and, in addition to support aimed at employers generally, include specific support for the hospitality and leisure and the housing and construction sectors.
- “Job Retention Bonus”. Following on from the Coronavirus Job Retention Scheme (the “furlough scheme”), the Government will introduce a one-off payment of £1,000 to employers for each furloughed employee who is brought back to work and continuously employed through to the end of January 2021. In order to ensure that furloughed employees are not simply brought back on a sporadic or part time basis purely for the sake of claiming the Job Retention Bonus, employees must earn above the lower earnings limit for NICs (£520 per month) on average between the end of the furlough scheme and the end of January 2021. Payments under the Job Retention Bonus will be made from February 2021. Further detail will be announced by the end of July 2020. For further information on the Job Retention Bonus, as well as detail on the Job Retention Scheme itself, see Coronavirus: Job Retention Scheme.
- New “Kickstart Scheme”. The Government will introduce a new (£2 billion) scheme to create 6-month work placements aimed at those aged 16-24 who are on Universal Credit. Funding available for each job will cover 100% of the relevant National Minimum Wage for 25 hours a week, plus the associated employer National Insurance contributions and employer minimum automatic enrolment contributions. Further detail is awaited.
- Support for Traineeships. The Government will fund employers who provide trainees with work experience, at a rate of £1,000 per trainee, and the Government will also expand eligibility for traineeships to those with Level 3 qualifications and below.
- New Apprenticeships. The Government will introduce a payment of £2,000 to employers in England for each new apprentice they hire aged under 25, and a £1,500 payment for each new apprentice they hire aged 25 and over, from 1 August 2020 to 31 January 2021. These payments will be in addition to the existing £1,000 payment the Government already provides for new 16-18 year-old apprentices and (where it applies) those aged under 25 with an Education, Health and Care Plan.
Drinks, hospitality and leisure sectors
- “Eat Out to Help Out”. In order to support the drinks and hospitality sector, the Government will introduce the Eat Out to Help Out scheme to encourage people to return to eating out. The scheme will entitle every diner to a 50% discount of up to £10 per head on their meal, at any participating restaurant, café, pub or other eligible food service establishment. The discount can be used an unlimited number of times and will be valid from Monday to Wednesday on any eat-in meal (including on non-alcoholic drinks) for the entire month of August 2020 across the UK. Participating establishments will be fully reimbursed for the 50% discount.
- Temporary VAT cut for food and non-alcoholic drinks – From 15 July 2020 to 12 January 2021, a 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. Cold takeaway food will continue to remain zero-rated. Further guidance on the scope of this relief is expected to be published by HMRC shortly.
- Temporary VAT cut for accommodation and attractions – From 15 July 2020 to 12 January 2021, to support businesses and jobs, a reduced (5%) rate of VAT will apply to supplies of accommodation (such as hotels, bed and breakfasts, campsites and caravan sites) and admission to attractions (such as cinemas, theme parks and zoos) across the UK. Further guidance on the scope of this relief is expected to be published by HMRC in the coming days.
Support for the housing and construction sector
- Temporary Stamp Duty Land Tax (SDLT) cut – The Government will temporarily increase the Nil Rate Band of residential SDLT, in England and Northern Ireland, from £125,000 to £500,000. This will apply for all transactions (including the purchase of second homes or buy-to-let properties, though in such cases the higher 3% rates of SDLT will continue to apply on top of the standard rates, including in relation to the first £500,000) which complete or substantially perform between 8 July 2020 and 31 March 2021 and could save home purchasers spending £500,000 or more on a home up to £15,000.
- Green Homes Grant – The Government will introduce a £2 billion Green Homes Grant, providing at least £2 for every £1 homeowners and landlords spend to make their homes more energy efficient, up to £5,000 per household.
If you would like to talk through the consequences for your business, please email us and one of our team will get in touch.
The content of this page is a summary of the law in force at the date of publication and is not exhaustive, nor does it contain definitive advice. Specialist legal advice should be sought in relation to any queries that may arise.
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