Submitted by Sestini & Co
| on Thu, 07/09/2020 - 9:17 | In Buy to Let
In the Chancellor’s summer statement of 8th July (not formally called a budget) a number of fiscal measures were introduced which are designed to help the businesses and workers hardest hit by the ramifications of the Covid-19 coronavirus.
Whilst welcome, businesses will likely find the boundaries of the measures quite hard to meet and the administrative burden of registering for the schemes, claiming the monies and record keeping somewhat stressful.
Stamp duty holiday: For individuals and consumers, the headline measure is that stamp duty has been removed with immediate effect on properties with a purchase price up to £500,000.
This measure designed to get the property market and the long tail of related businesses moving, including estate agents, tradesmen, planning and construction. It applies in England and Northern Ireland only, and will run until 31st March 2021.
It’s also welcome news for second home or property investors who will benefit from the same measure although will still be liable to pay the 3% surcharge.
VAT reduction: Leisure, tourism and food industry will benefit from a reduction in VAT on items sold from 20% to 5% in a move designed to make it more affordable for customers to choose eat in or hot takeaway food, to book accommodation in hotels, B&Bs, campsite and caravan sites, or to visit attractions such as cinemas, theme parks and zoos. The measure will come into effect on 15th July and run until 12th January 2021.
Eat Out to Help Out: Designed to help restaurants, pubs and cafes increase customer numbers after forced closures due to lockdown, this measure is not quite what many would have helped for.
Rather than issue all UK residents with a voucher which could be spent across a 3-month period, the measure is restricted to Mondays-Wednesdays during August and gives diners up to £10 per head off on food and soft drinks in selected establishments.
Restauranteurs and other food businesses will need to register for the scheme next week and will be able to reclaim the money in arrears, possibly making cash flow tough for them during August. Critics also note that there are families and individuals who have faced extremely tough times financially due to Covid-19 and will not have enough funds to eat out.
Staff: The furlough scheme comes to an end in October and rather than extend it, there are a number of measures designed to help employers re-employ furloughed staff or to take on new staff or new trainees, and to help long-term unemployed people. Again, these are arguably somewhat difficult to navigate administratively but should be of some help to employers keen to get staff back to work.
There are a number of new schemes, including:
- The Job Retention Bonus: if employers bring staff back from furlough and employ them from November to January, the business will get a £1k bonus. Employees must be doing ‘useful work’, the Chancellor noted. This was perhaps an alternative to the National Insurance cut that some had hoped for.
- The Kickstart Scheme for young people will pay employers to create new jobs for 16-24 year olds at risk of long term unemployment. The job must entail at least 25 hours per week of work and be ‘good quality’ jobs. The government pay the young people’s wages for six months if criteria are met. Employers can apply from August with first ‘kickstarters’ in the scheme in work from the autumn.
- Apprenticeships will also be expanded; employers will be paid to create new apprenticeships and employers will be paid £2k per apprentice. There will also be a scheme for apprentices over 25 where employers will receive £1.5k. The measures apply to people hired from August 1st.
Green homes: New measures are also coming into play designed to help climate resilience through improved insulation.
Households can claim for projects to make homes more energy efficient in England, with homeowners typically set to reclaim two thirds of the project price, up to £5k for most households, up to £10k for poorer families. Landlords can also claim.
If you have questions about this area, do get in touch and we’ll be happy to discuss. You can give us a call on 01761 241 861 or email us today to set up a telephone call or online meeting.