Friday, July 24th, 2020
Here at Copia Wealth & Tax, our team of business advisors continue to make a real effort to keep our clients up to speed with any Government announcements that are made in connection with the various COVID-19 support schemes.
Whilst we await the first post-COVID Autumn Budget with bated breath, we’ve set out below a summary of the key announcements made on 8th July by the Chancellor of the Exchequer in his Summer Statement, including a raft of measures that will support sectors, such as hospitality, that have been significantly affected by the crisis.
Grants and reliefs offered include support for:
The expected reduction in VAT was confirmed but was restricted to the hospitality and tourism sector, whilst an across the board decrease was rejected.
To boost the flagging property market, Stamp Duty is being reduced in England and Northern Ireland. Separate announcements on this topic are awaited for Scotland and Wales who have their own stamp duty regimes.
These recent changes are summarised below:
In an attempt to encourage employers to bring back furloughed employees and provide them with gainful employment, employers that bring back a previously furloughed employee and continuously employ them through to January 2021 will be entitled to a new Job Retention Bonus of £1,000 per employee retained. Employees must be seen to be gainfully employed during this period and be paid a monthly average wage of at least £520 a month (November 2020 to January 2021).
This new scheme will benefit employers that are prepared to create new jobs for young people (16 to 24-year-olds) who are at risk of long-term unemployment. The scheme will cover their wages (plus associated overheads) for six months. To qualify, these must be new jobs that offer at least 25 hours a week for youngsters paid the National Minimum Wage or above. Employers will need to provide training and support to find a permanent job. Employers can apply to benefit from this scheme from next month – August 2020. An initial £2bn of funding has been made available, but there is no cap on the number of jobs that can be created.
Employers that create new apprenticeships for the next six months will be eligible to claim a new grant. The amount claimed will depend on the age of the apprentice.
From September 2020, homeowners and landlords will be able to apply for a grant to make their homes more energy efficient. The grant will cover at least two-thirds of the cost up to £5,000 per household. For low income households, these grants will cover all costs up to £10,000.
To encourage homeowners and prospective buyers to step into the housing market, the government is offering a temporary reduction in Stamp Duty Land Tax (SDLT) in England and Northern Ireland (regional variations may apply when announced). At present, no SDLT is payable on residential property purchases below £125,000. From today – for a temporary period to 31 March 2021 – this threshold is increased to £500,000. Accordingly, if you buy a home after today and before 31 March 2021, and you spend less than £500,000, you will have no SDLT to pay. It is projected that this will reduce the average stamp duty bill by £4,500.
Regional variations may apply and if you buy a second residential property in the same period you will still have to pay the 3% SDLT additional rate for property purchases up to £500,000.
You can use the table to work out the SDLT due:
Property or lease premium or transfer value SDLT rate
From 8 July 2020 to 31 March 2021, the special rules for first time buyers are replaced by the reduced 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 therefore apply for additional dwellings:
Property or lease premium or transfer value SDLT rate
Companies buying residential property a) worth less than £500,000 or b) of any value where they meet the relief conditions from the corporate 15% SDLT charge will also benefit from these changes.
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 had been speculated, for the next six months VAT charged on food, accommodation, attractions, and other services in restaurants cafes and pubs, cinemas, theme parks, zoos and more will see VAT reduced from 20% to 5%. This will apply from 15th July 2020 and will end on the 12th January 2021.
Next month, the Chancellor wants to encourage us to eat out. In a novel approach to boost the hospitality and tourism sector, meals eaten at any participating business on a Monday, Tuesday, or Wednesday during August will attract a discount of 50% up to a maximum discount of £10 per head, including children. To participate in this scheme, eligible businesses will need to register and can do so through a website to be opened next Monday.
Whilst these unprecedented levels of Government support continue to be put in place, it is important to ensure your organisation has taken full benefit wherever possible. The above measures especially impact on jobs going forward and so it will be an opportune time to fully consider your staffing requirements in the post-COVID period – there may be some good candidates on the market over the next few months.
The team here at your Wolverhampton Accountants Copia Wealth & Tax Ltd is always here to provide guidance and support. If you feel we may be able to help, please call one of our friendly experts on 01902 783172 or alternatively, just click HERE to contact us via the form on our website and we will be in touch.
In the meantime, we will continue to provide you with regular updates as and when we get them with a view to helping you and/or your business navigate these exceedingly difficult times.
We very much look forward to hearing from you.