Summer Economic Update
On Wednesday 8th July 2020, the Chancellor Rishi Sunak made a speech entitled “Summer Economic Update” where he unveiled further Government supports and he unveiled the Government’s plan for jobs which he described as the “Second phase in in the Government’s economic response to the crisis.”
The “Plan for Jobs” PDF can be seen:
Coronovirus job retention scheme (CJRS) and job retention bonus
The CJRS ends in October and the Chancellor looked to cushion expected redundancies with the announcement of a Job Retention Bonus (JRB). The new scheme will give employers £1,000 for each previously furloughed employee they retain and keep in employment until January 2021, as long as they are paid at least £520 a month. Further details of the scheme are expected later in July.
Kickstart scheme and measures to help people find word
In order to support individuals finding jobs, the Chancellor proclaimed the Kickstart scheme, which can give £2 billion to support the creation of “high quality” six-month work placements for sixteen to 24-year-olds on Universal Credit and in danger of long-run state.
The Government can give employers that provide the placements funding comparable to a hundred per cent of the relevant level of the National remuneration (NMW) for twenty five hours every week to push Economic.
The apprenticeships funding can give £2,000 to employers in England for each apprentice employed under the age of twenty five and £1,500 for every fresh employed apprentice aged twenty five or older. This funding is in addition to schemes already in place to support employers in engaging apprentices.
Value added tax reduced rate for hospitality and tourism sectors
The Chancellor outlined a VAT rate cut for the Hospitality and Tourism sectors from 20 per cent to five per cent. The measures relate specifically to food and non-alcoholic drinks and to accommodation and admission to attractions, with further details expected to be published later.
The VAT rate change comes into effect on Wednesday 15 July 2020 and will be in place temporarily until 12 January 2021.
Eat out to help out
The “Eat Out to Help Out” scheme will provide a discount of 50 per cent of up to £10 a person on eat-in meals, including non-alcoholic drinks, at participating establishments on Mondays, Tuesdays and Wednesdays for the month of August.
Restaurants, cafes and pubs can sign-up for the scheme on a new website on Monday 13 July 2020.
Stamp duty land tax holiday and job creation measures
There is a temporary cut in Stamp Duty Land Tax (SDLT) from 8 July by raising the nil-rate band from £125,000 to £500,000 until 31 March 2021. The Treasury estimates that, as a consequence, around nine in 10 people buying a main residence will pay no SDLT.
Further details can be found on SDLT changes here: https://www.gov.uk/guidance/stamp-duty-land-tax-temporary-reduced-rates
Residential rates on purchases from 8 July 2020 To 31 March 2021
If you purchase a residential property between 8 July 2020 to 31 March 2021, you only start to pay SDLT on the amount that you pay for the property above £500,000. These rates apply whether you are buying your first home or have owned property before.
You can use the table to work out the SDLT due:
Property or lease premium or transfer value SDLT rate
Up to £500,000 Zero
The next £425,000 (the portion from £500,001 to £925,000) 5%
The next £575,000 (the portion from £925,001 to £1.5 million) 10%
The remaining amount (the portion above £1.5 million) 12%
From 8 July 2020 to 31 March 2021 the special rules for first time buyers are replaced by the reduced rates for additional properties
Higher rates for additional properties
The 3% higher rate for purchases of additional dwellings applies on top of revised standard rates above for the period 8 July 2020 to 31 March 2021.
The following rates apply:
Property or lease premium or transfer value SDLT rate
Up to £500,000 3%
The next £425,000 (the portion from £500,001 to £925,000) 8%
The next £575,000 (the portion from £925,001 to £1.5 million) 13%
The remaining amount (the portion above £1.5 million) 15%
New leasehold sales and transfers
The nil rate band which applies to the ‘net present value’ of any rents payable for residential property is also increased to £500,000 from 8 July 2020 until 31 March 2021.
The following rates will apply:
Net Present Value of any Rent SDLT rate
Up to £500,000 Zero
Over £500,000 1%
Companies as well as individuals buying residential property worth less than £500,000 will also benefit economic from these changes, as will companies that buy residential property of any value where they meet the relief conditions from the corporate 15% SDLT charge.
On the 1 April 2021, the reduced rates shown in the above tables will revert to the rates of SDLT that were in place prior to 8 July 2020.
As outlined above we will keep you up to date with these and other measures as the Government releases further details. Please talk to us if you need any help during this time.
How to treat certain expenses and benefits provided to employees during Coronovirus (COVID-19)
The Government has updated its guidance on taxable expenses and benefits when they are paid to employees because of coronavirus and how to report them to HMRC.
The polemic news that a Covid-19 take a look at, if paid by the leader, is ratable to the worker and isn’t lined off by the government steerage below. we have a tendency to do expect a modification of mind from the government and can keep you updated in due course.
The guidance is about Income Tax Economic treatment only. National Insurance contributions treatment may vary depending on the individual benefit or expense and it covers:
Please talk to us if you have any questions about expenses and benefits or check out the government guidance here: https://www.gov.uk/guidance/how-to-treat-certain-expenses-and-benefits-provided-to-employees-during-coronavirus-covid-19?utm_source=1208630f-7cdb-4452-bba8-56c1ea5c89e2&utm_medium=email&utm_campaign=govuk-notifications&utm_content=immediate
Help and support if your business is affected by Corovirus (COVID-19)
Watch videos and register for the free webinars to learn more about the support available to help you deal with the economic impacts of coronavirus.
Guidance for people receiving direct payments
Advice for those that get care and support through an immediate payment, such as local authorities, clinical review teams and people who offer care and support. The steerage sets out guidance for people and organisationsthat will facilitate slowing the transmission of the coronavirus as the spreading progresses across the country.
It is amid further steerage, principally aimed toward direct payment holders, that directly responds to queries and considerations raised by direct payment holders, personal assistants, and charities and organisations that support them.
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