Chancellor Rishi Sunak announced several measures to protect businesses from the ongoing economic shock caused by the coronavirus crisis.
Since lockdown was declared on 23 March 2020, the Chancellor has splashed out in excess of £160 billion to support the UK economy from going beyond the point of no return.
That support was desperately needed after UK GDP slumped 25% during the height of the lockdown in March and April. To add context, it took 18 years for the UK economy to grow by 25% only for it to be wiped away in a month.
Sunak knows the scale of the task ahead to claw back those billions, and the Chancellor will reveal his hand in an Autumn Budget and subsequent spending review.
However, for the immediate months ahead, five key measures are due to kick in to help struggling businesses around the country get back on their feet.
Here’s what you need to know.
Job retention bonus
If you employ staff who have been placed on furlough since the outbreak of COVID-19, you may qualify for a bonus of up to £1,000 per worker.
Furloughed workers – and there are 9.4 million of them at the time of writing – need to remain on payroll until January 2021 to be eligible for the bonus.
After the furlough scheme ends on 31 October 2020, you will need to pay furloughed staff at least £520 a month until the new year.
Businesses are being invited to take on trainees aged 16 to 24 who are in receipt of Universal Credit and have the costs reimbursed.
To qualify for the funding, employers need to offer trainees at least 25 hours a week for a minimum period of six months.
Should you meet those conditions, the Government will pay:
- a worker’s entire minimum wage for 25 hours a week
- associated employer National Insurance contributions
- employer workplace pension contributions.
Applications are expected to open next month ahead of the first jobs being taken up in the autumn.
Payments for apprentices
From 1 August 2020, employers will be offered further cash incentives to take on new apprentices until 31 January 2021.
Before the Chancellor’s speech, employers could receive a £1,000 payment for every new apprentice they took on under the age of 25.
Employers will soon be able to get either £1,500 (over-25s) and £2,000 (under-25s) from the Government for taking on new apprentices.
It’s important to stress this will only apply to new apprentices, not existing ones on your books.
Temporary VAT cut
Everyone knows how hard the hospitality and tourism sectors have been hit by the effects of lockdown and coronavirus.
From 15 July 2020 to 12 January 2021, VAT-registered businesses operating in these sectors will pay the standard rate of VAT at 5% instead of 20%.
That should provide a big boost to VAT-registered restaurants, pubs, bars, cafés and similar premises all around the UK.
The temporarily reduced rate also applies to supplies of accommodation, such as hotels and B&Bs, and admission to attractions.
‘Eat out to help out’
If you run a business that serves food to paying customers, you will have an extra incentive to open your doors next month.
Signing up to the ‘eat out to help out’ scheme allows you to offer diners a 50% discount of up to £10 per head on any meals or drinks.
The scheme will run from Mondays to Wednesdays throughout August, with the Government fully reimbursing the 50% discount.
For any further information on any of these measures, get in touch with us at email@example.com or on 01454 619900.