We would like to update you on a number of matters:
The Chancellor, Rishi Sunak delivered his summer statement yesterday. This included a number of measures designed to minimise the economic harm arising from the virus. We have summarised the most important measures below:
Job Retention Bonus
Employers will receive a one-off payment of £1,000 for every employee who returns from furlough and who remains continuously employed through to the end of January 2021. To qualify, each returning employee must earn above the Lower Earnings Limit (£520 per month) on average between the end of the Coronavirus Job Retention Scheme (31 October 2020) and the end of January 2021. Payments will be made from February 2021. Further detail about the scheme will be announced by the end of July.
Temporary VAT cut for hospitality, accommodation and tourist attractions
From 15 July 2020 to 12 January 2021, the 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. It will also apply to supplies of accommodation and admission to attractions.
Detailed guidance on the scope of supplies covered by the VAT reduction will be published by HMRC in the coming days. It should be noted that there is no requirement to pass on the VAT saving to customers – whether you do so is a commercial decision, weighing up the benefits of cutting prices to attract customers against the additional costs which social distancing regulations impose on businesses in this sector.
Alongside this the government has also announced the “Eat Out to Help Out” scheme which 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 unlimited times and will be valid 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. This scheme is clearly intended to attract customers by reducing costs to the public.
Taking on new employees
The government has announced three schemes to encourage employers to train new employees, particular younger individuals:
- An additional 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 1st August 2020 to 31st January 2021.
- Funding 100% of the National Minimum Wage, employer National Insurance and pension contributions for 25 hours a week for 6 month work placements for 16-24 year olds who are on Universal Credit and are deemed to be at risk of long-term unemployment.
- Paying £1000 per trainee to employers who provide trainees aged 16-24 with work experience.
Temporary Stamp Duty Land Tax (SDLT) cut
SDLT on residential property in England and Northern Ireland has been cut to 0% for properties costing up to £500,000 from now until 31 March 2021.
It has not yet been confirmed whether the SDLT reduction also applies to the 3% supplement for second homes, buy to lets and properties purchased by companies. However we would note that the initial guidance refers to homebuyers only, and not to investors.
Green Homes Grant
The Green Homes Grant, will provide at least £2 for every £1 homeowners and landlords spend to make their homes more energy efficient, up to £5,000 per household. For those on the lowest incomes, the scheme will fully fund energy efficiency measures of up to £10,000 per household.
Full details of the package are at on the Government website
Self Employed Income Support Scheme
This is a final reminder to those who are eligible that the final deadline for claiming this grant for the period March to May is Monday 13th July. Individuals have to claim this grant themselves through their government gateway account, we as agents are not permitted by HMRC to do this for you.
A second grant is due to be made available in August for those self-employed individuals whose businesses remain affected by the virus. Click here for more details.
Deferral of July payment on account
As part of the Coronavirus support measures announced in March, the payment on account of income tax ordinarily due on 31 July has been deferred, on an interest free basis, until 31 January 2021.
You may receive a statement from HMRC which shows the payment we advised you to make in July when we prepared your 2018/19 tax return as due on 31 January 2021. This is correct and is a result of the government’s support package.
If you do choose to defer paying the tax ordinarily due in July until 31 January, please do bear in mind that you will need to make a double tax payment in January as the tax normally due in July and that due in January 2021 will both fall due together. As the amount of tax due in January 2021 is likely to be significantly higher than normal for many people, we would recommend that tax returns are completed in advance of the deadline wherever possible to minimise the risk of unwelcome surprises in late January.
Powers of attorney
We would also like to remind clients of the importance of having a Power of Attorney in place to protect your business should you, as owner, be incapacitated for any reason. If one is not in place then someone would need to go to Court to obtain permission to operate the business on your behalf. It is always best practice to have one, but is particularly important at the moment as we understand there are currently major delays in the Court system. This means that the impact on your business would be significantly greater than would normally be the case.
We can provide referrals to a number of local lawyers to assist.
Harts Macclesfield Office Remains Open
Our Macclesfield office remains open to clients for the collection and drop off of records and video conference meetings can be arranged.
Our Cheadle office reception area is currently closed so please contact us if you wish to drop off records so we can organise alternative arrangements with you.
Please feel free to call us if you would like to arrange a meeting through your preferred contact.
Get in Touch
Call or email us at Harts if you have any queries about topics covered above or to find out more about our services at Harts.