COVID-19 Chancellor’s Mini Budget

Furlough Bonus

• £1,000 bonus given to companies who:

• • Have furloughed an employee AND
  • That employee is still working for the employer on 31^st January 2021 AND
  • The employee earns at least the lower earnings NI threshold (£520pm) in the period 1 November 2020 to 31 January 2021.

• The bonus will go to the employer. It will be taxable like any normal income.

VAT for hospitality, accommodation and attractions

• From 15^th July 2020 to 12^th January 2021 VAT on qualifying supplies will be at 5% instead of 20% – we have no idea why government have chosen mid-month dates – certainly not for simplicity.
• Businesses with programmable tills will need to plan in advance – some supplies could have 3 different VAT rates on one till receipt.
• General Eligibility – the supply of:

• • Food and non-alcoholic drinks for on-premises consumption.
  • Hot take away food.
  • Hot take away non-alcoholic drinks (but not cold take away drinks).
  • Sleeping accommodation and associated facilities.
  • Pitch fees for caravans and tents and associated facilities.

• So this is relevant to:

• • Restaurants.
  • Cafes.
  • Fish and chip shops.
  • Fast food outlets.
  • Shops that provide take away coffees, etc.
  • Pubs.
  • Mobile catering.
  • Hotels.
  • Holiday Lets.
  • Campsites.
  • Caravan sites.
  • Hostels.
  • Guest houses.

• Admissions to the following attractions qualify for 5% rate:

• • Theatres.
  • Circuses.
  • Fairs.
  • Amusement parks.
  • Concerts.
  • Museums.
  • Zoos.
  • Cinemas.
  • Exhibitions.
  • Similar cultural events and facilities.

• If any of the above are eligible for the cultural VAT exemption then the exemption takes precedent.
• It is anticipated that the businesses will keep the reduction in VAT rather than reduce the prices to the consumer. Again depending on your till set up this may take some reprogramming.
• Complexities to consider:

• • Flat Rate Scheme – percentages will change TBA (speak to us or monitor HMRC website as no details at the moment).
  • Tour Operators Margin Scheme – impact TBA (speak to us or monitor HMRC website as no details at the moment).
  • Supplies that straddle the temporary reduction eg Season tickets to attractions – (speak to us).
  • Make sure your tills can cope!

Apprenticeships and Traineeships (work placement) grants

• Apprenticeship grants:
  • £2,000 for new apprentices aged 16-24.
  • £1,500 for new apprentices aged 25 and over.
  • The grant is addition to any other incentives received for employing an apprentice.
  • An apprenticeship is for at least 1 year.
• Traineeship grants
  • £1,000 for new trainees aged between 16-24.
  • Traineeships are effectively work placement for between 6 weeks and 6 months.
  • For people currently unemployed or working less than 16 hours pw.
  • No obligation for the employer to pay a wage.
• Both grants are for new starters hired between 1 August 2020 and 31 January 2021.

Stamp Duty Land Tax Reduction

• Temporary reduction in stamp duty land tax for residential properties – 0% up to £500,000.

Property Value	New Rate	Old Rate
Up to £125,000	0%	0%
£125,001-£250,000	0%	2%
£250,000- £500,000	0%	5%
£500,001 – £925,000	5%	5%
£925,000 – £1,500,000	10%	10%
Over £1,500,000	12%	12%

• Maximum saving £15,000 i.e. purchase a house for £500,000.
• Reduction from 8^th July 2020 to 31^st March 2021.
• 3% supplement for second houses still applies on all bands.

Eating Out to Help Out

• 50% discount up to £10 per person (inclusive of VAT at 5%) on all food and non alcoholic drinks to consume inside.
• Scheme runs from 3^rd August to 31^st August 2020.
• Only for sales on Monday, Tuesday and Wednesday.
• Businesses who want to use the scheme must register with HMRC from 13^th July 2020 – see for all the detail you will need to provide – https://www.gov.uk/guidance/register-your-establishment-for-the-eat-out-to-help-out-scheme

 

 

• Eligible businesses must:
  • Sell food for immediate consumption on premises.
  • Provide or share dining area for meals to be consumed on site.
  • Be registered with the local authority as a food business on 7^th July 2020.
• Businesses include:
  • Restaurants.
  • Cafés.
  • Pubs.
  • Hotel restaurants.
  • Restaurants and cafes within tourist attractions, holiday sites and leisure facilities.
  • Dining rooms within members’ clubs.
  • Workplace and school canteens.
  • Dining cars on trains (do they still exist??).
• The discount applies even if the food/drink is consumed outdoors – but must be on your (or shared with other food outlets) premises.
• Not eligible:
  • Catering service e.g. weddings.
  • Breakfast when sold as part of Bed and Breakfast package – (Breakfast sold separately is eligible).
  • Service charge on a bill.
• Where there is more than one diner any discount calculation is worked out on the group as a whole not individually.
• If the establishment offers their own discounts these must be taken off before the Eat Out to Help Out discount is calculated.
• Contact us if you want details of how to calculate the discount.
• Taking away a doggy bag still counts for the discount!