09.07.2020: Summer Statement
The Chancellor announced a second phase of help / incentives to business owners yesterday when delivering his summer statement.
Despite requests to keep the furlough scheme running past 31st October, the chancellor is instead offering a furlough bonus of £1,000 per employee that is brought back to work in November and stays until at least January 2021.
For employers to qualify for the bonus they must retain an employee(s) who would otherwise have been made redundant at the end of the furlough scheme and they must be doing ‘decent work’ at a cost of £520 or more per month to the employer.
The bonuses will be issued in February 2021 and we will assume a claim system will be put in place where employers will have to certify they meet the criteria. We will update you when more information is released.
Designed to help younger people find work / experience employers will be able to apply for a grant of around £6,500 to fund a 6-month work placement for anyone under 25 working at least 25 hours per week.
The role must be additional to the employers normal staffing requirements and the candidate must be paid at least minimum wage; the placements should be ready to start in the autumn.
A further £2,000 will be paid to employers who create new apprenticeships with a £1,500 bonus if employers hire apprentices over 25-years-old.
VAT cut for the hospitality sector
To stimulate the hospitality and tourism sector the chancellor has cut the VAT rate on food and non-alcoholic drinks from 20% down to 5%, this cut will commence from 15th July and run until 12th January. HMRC are to release more information in the coming days and so we will be speaking with clients who are affected by this once we have read the guidance.
Eat Out to Help Out
This government does like a slogan! This incentive is to encourage people to dine out in August by offering a 50% discount, up to £10 per head, off food on Mondays, Tuesdays, and Wednesdays at participating restaurants. Businesses will be able to register for the scheme from Monday and reimbursements will be made weekly in August.
Employment Allowance Letters
Some clients have been in touch this week after receiving a letter from HMRC regarding the Employment Allowance. This is an annual allowance that small employers are entitled to, its offsets up to £4,000 from your employer’s national insurance bill and has been available for a few years now. We automatically make this claim for you, if you are eligible, when we run the payroll and the amount claimed is shown each month on your P32 reports.
The letters have been sent this year as the rules changed and the EA now falls under State Aid, at the beginning of the year this wouldn’t have made any difference to most businesses but after the COVID-19 initiatives it could hinder some of you in your ability to claim. All grants, JRS, Bounce Back Loans and CBILS recently issued all fall under State Aid rules as well and there is a limit on the amount of Aid you can receive in any 3 year period of €200,000.
There will be a very limited number of clients that this might affect, and we are monitoring those clients to ensure they do not go over the limit. We will contact you if necessary, to discuss your options if it looks like this limit will be reached.
For those clients who employees are affected by the flexi furlough rules then we encourage you to keep a timesheet of the hours worked by employees so we are able to work out the employees pay and the furlough claim. If your payroll is run through Xero then this can be completed easily within My Payroll of which your employees will have access already, if instructions are required then please let us know and we will send them over to you.
For those employers who are not on Xero payroll then please do get in touch and we will happily provide a timesheet template for your employees to use.
Should you have further questions or require any further assistance after this update then please do get in contact with us where we will endeavour to assist as much as possible.