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  • Henry Reeves & Co.

Summer Statement - July 2020

On 8th July 2020, the Chancellor announced new measures as a result of the Coronavirus pandemic. Below is a summary of the key changes introduced. As always, please contact us should you have any further questions.

Introduction of the Job Retention Bonus

The government will introduce a one-off payment of £1,000 to UK employers for every furloughed employee who remains continuously employed through to the end of January 2021. The aim of the bonus scheme is to provide additional support to employers so that they can retain their employees.

To be eligible, employees will need to:

1) earn at least £520 per month (above the Lower Earnings Limit) on average between the end of the Coronavirus Job Retention Scheme and the end of January 2021 (November 2020 to January 2021).

2) have been furloughed by the employer at any point and legitimately claimed for under the Coronavirus Job Retention Scheme.

3) have been continuously employed by the employer up until at least 31st January 2021.

Employers will be able to claim the bonus from February 2021 once accurate RTI data to 31st January 2021 has been received. More information about this scheme will be available by 31st July 2020 and full guidance will be published in Autumn of this year.

VAT Reduction

From 15th July 2020 until 12th January 2021, the UK government will reduce VAT from 20% to 5% across the hospitality, holiday accommodation and attraction sectors.

Businesses will benefit from the reduced rate if they:

1) supply food and non-alcoholic beverages for in house consumption such as pubs, cafés and restaurants.

2) supply hot takeaway food and hot takeaway non-alcoholic beverages

3) supply sleeping accommodation in a hotel or similar establishment, pitch fees for caravans and tents.

4) supply admission to theatres, circuses, fairs, amusement parks, concerts, museums, zoos, cinemas, exhibitions and similar cultural events and facilities. If the fee you charge is currently exempt, then the existing legislation will take precedence.

In order to calculate the VAT element on the VAT inclusive price you will need to use the VAT fraction which is 1/21 for 5% VAT.

SDLT Threshold

The government have also announced that there will be an increase in the Stamp Duty Land Tax (SDLT) threshold in England and Northern Ireland. The threshold increase will mean no SDLT is paid on the purchase of a main home from £125,000 to £500,000. The change has been immediately implemented and will be effective until 31st March 2021.

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