Please join us in welcoming Ryan to team Blu Sky!…
The job retention plan
It’s time for the chancellors summer statement. Today Rishi Sunak announced his “job retention plan”. Here’s our Blu Sky summary!
Since Coronavirus struck, there have been a number of initiatives introduced, along with a whole new set of acronyms for us to learn. Here at Blu Sky we have a ‘no jargon’ promise, but Rishi Sunak has not made that easy.
Rishi introduced some clarity over how he sees things developing. The first batch of initiatives previously introduced – phase 1 – were about protection. We’re now moving into phase 2 – jobs, with a phase 3 to follow at some stage, presumably in the Budget statement this autumn – rebuild.
I’ll summarise the latest developments, as we see impacting Blu Sky clients, minus the surrounding political waffle.
I’ll focus on the financial aspect here. There’s the introduction of a jobs retention bonus for employers. If you bring any employee back from furlough and continuously employ them through to January 31st a £1,000 bonus can be claimed. The employee must be paid a minimum of £520 a month from October-January. The payment will be made in February.
For 16-24 year olds the Kickstart scheme has been announced. The funding applies for a minimum 6-month placement of those on Universal Credit and at risk of long term unemployment. More detailed definition is needed here. The scheme will directly pay employers for a minimum of 25 hours at national minimum wage, plus relevant employers national insurance and pension contributions. Employers can apply from August with the scheme to start in the autumn. There is no cap on places available.
There will also be one-off payments of £2,000 for each new apprentice hired aged under 25 between 1st August and 31st January, and £1,500 for older apprentices. This is in addition to existing apprenticeship grants.
Home owners and landlords
There’s good news for home owners and landlords. Firstly, as expected, Stamp Duty Land Tax (SDLT) has changed as expected. The nil rate band temporarily increases from £125,000 to £500,000 with immediate effect and until 31st March.
This group can also apply for vouchers worth up to 2/3 of the cost (maximum £5,000) for green home improvements.
Hospitality and tourism sector
The hospitality and tourism sector is an industry supporting 2 million jobs and disproportionately young, female and BAME. To help businesses replace lost income and profit there will be a temporary VAT cut from standard (20%) to reduced (5%) rate starting Wednesday 15th July and ending on 12th January for food and non-alcoholic drinks. You want more detail? “Further guidance on the scope of this relief will be published by HMRC in the coming days”. Rumour has it that it will apply only to those sales consumed on the premises, but hey, that’s Twitter for you.
For August only, there is also the introduction of an ‘eat out to help out’ scheme. Meals eaten on the premises at any participating business (so definitely not takeaways), Monday to Wednesday, can attract a 50% discount up to £10 per head. Use of the scheme is unlimited, so fill your boots everyone. Steve Robinson, this one is for you.
Businesses can register to participate online from Monday and will receive the discounts applied back in full. We expect this to be a one-off application and payment in early September, but we’ll await further confirmation.
There’s much more of a dispersed nature – the automotive transformation fund (which isn’t very large in the scheme of things), the social housing decarbonisation fund, the cultural recovery fund, the green jobs challenge fund, the towns fund capital acceleration and others. As is the nature of these documents, some of this will be recycled news. Sketchy initial details can all be found here
And a recap on Phase 1
Let’s take time to very briefly summarise some of what we already knew in terms of phase 1 announcements:
It was confirmed that The Coronavirus Job Retention Scheme (CJRS) will cease at the end of October. The existing month on month changes will still apply – the introduction of part-time furlough this month, removal of repayment of employers national insurance and pension contributions in August, a reduction of the grant to 70% in September and 60% in October. Dragging the scheme on longer will give ‘false hope’.
Many businesses have deferred VAT payments due between 20th March and the end of June. Remember this is a deferral, not a cancellation, and the payment must be made in full by 31st March 2021. What you have here is a cashflow benefit. For any of you who have taken advantage of this, and cancelled your direct debits, don’t forget to reset the direct debit otherwise there may be penalties awaiting.
The extension to the Self Employed Income Support Scheme (SEISS) remains in place, with the ability to apply for a second ‘one-off’ grant in August of 70% of normal trading income provided trade is still adversely affected by Coronavirus on 14th July.
The loans schemes. Coronavirus Business Interruption Loan Scheme (CBILS) and Bounce Back Loan Scheme (BBL) continue with no changes to the current scheme end dates of 23rd September and 4th November respectively. There are no changes to application criteria.
The Future Fund also remains open until September 30th. This match-funds new investment with some fairly stringent conditions.
Business rates based grants managed through the local authorities seem have been pretty well managed through to completion now. Remember please – someone will always be surprised – these grants are taxable.
For further, more exhaustive detail on any of this check out the relevant GOV.UK web-pages signposted from here, check our blog page here, follow our twitter account or just drop me an email. Dave@blusky.co.uk
It’s time for a little celebration as we welcome a new person to team Blu Sky! Simon has joined us as a Client Payroll Specialist.
As every business owner and most employees, find themselves working from home more than ever before it is important the that the tax implications of this new way of working are understood.