Summer Statement
Rishi Sunak’s Summer Statement revealed Phase 2 of the economic response to Covid-19.Whilst the primary focus is to create and protect jobs, measures to support hospitality and tourism were announced, together with immediate Stamp Duty Land Tax cuts to stimulate the housing market.
We highlight some key measures and how they might help your business.
Jobs
Job Retention Bonus
- Where furloughed employees are brought back to work and employed continuously until 31 January 2021, the employer will be entitled to a payment of £1,000 per employee providing they earn above £520 per month between November 2020 and January 2021.
- Employers that hire new apprentices between 1 August 2020 and 31 January 2021 will receive a payment of £2,000 for each new apprentice aged under 25 and £1,500 for those aged 25 and over.
- Employers offering unpaid traineeships lasting between 6 weeks and 6 months may to be entitled to a £1,000 grant per traineeship.
Apprenticeship and Traineeships
Kickstart Scheme
- Where employers create work placement opportunities for those aged 16-24 who have been receiving Universal Credit and are at risk of long-term unemployment, they can receive funding for each 6-month work placement for 100% of the relevant National Minimum Wage for 25 hours a week plus employer’s NIC and automatic enrolment pension contributions.
With a range of incentives to stimulate training and job opportunities, it is a sensible time for businesses to review labour requirements and consider whether there are new ways of employing staff and bringing fresh ideas and energy to the business.
Stamp Duty Land Tax Cuts
Stamp Duty Land Tax (SDLT) on residential property purchases from 8 July 2020 to 31 March 2021 has been cut, creating savings of up to £15,000. The threshold for SDLT has been raised to £500,000 meaning that purchases of main residences costing up to £500,000 may not suffer any SDLT.
Whilst the 3% supplement will still apply where additional properties are purchased, it remains a more affordable time to considering purchasing properties for retirement, investment or to provide off-farm assets for non-farming children to inherit as part of succession planning.
Hospitality and Tourism
VAT will be reduced from 20% to 5% from 15 July 2020 until 12 January 2021 on food and non-alcoholic drinks served by restaurants, pubs, bars and cafes, together with accommodation and attractions.A very positive announcement for businesses operating in the sector, including diversified farm businesses with farm cafes, holiday lets and campsites.
‘Eat Out to Help Out’ was also announced with 50% discounts of up to £10 per head available for those eating Monday to Wednesday at participating businesses during August!
Green Homes Grant
Finally, the ‘Green Homes Grant’.
The government’s pledge to spend £3bn could be really helpful for homeowners or landlords looking to install energy-saving features such as double glazing and wall or roof insulation. At the time of writing, before the full details are available, it is thought that most homeowners will qualify. You may therefore be able to update employee accommodation, rental properties and potentially furnished holiday lets with new windows and insultation to potentially change their appearance and also reduce energy costs.
Similar to other capital grants you have to register, obtain quotes, get approval, and then will be eligible to receive a voucher for two-thirds of the qualifying expenditure capped at £5,000, unless you are a low-income family. The scheme opens in September and therefore we expect further details to be announced next month, including a comprehensive list of qualifying expenditure, details of whether it is per claimant or per property and any other qualifying criteria.
It is therefore sensible to consider your properties and energy saving improvements that could be made at an affordable cost with the Green Homes Grant.
If you would like to discuss how these measures could help you and your business then please contact us.
The content of this article is for general information only and does not constitute tax advice. It should not be relied upon and action which could affect your business should not be taken without appropriate professional advice.
Victoria Paley ACA CTA
Senior Tax Manager
Victoria joined the practice in July 2019 having worked in accountancy and tax in the rural sector since 2010. As a Chartered Accountant and Chartered Tax Adviser Victoria spends most of her time advising family farming businesses on Capital Gains Tax and Inheritance Tax matters primarily in relation to succession planning and capital transactions.
Outside of work Victoria spends most of her time running around after her two young children and riding her horse. Having always loved to travel, Victoria hopes to resume exploring the world with her family once the children are a little older!